Business Context and Reporting Period
Company: Targa Resources Corp. (TRC) and Targa Resources Partners LP (TRP)
Filing Type: Form 8-K (Current Report)
Date of Report: October 13, 2014
Event: Announcement of proposed merger agreements to acquire Atlas Energy, L.P. (ATLS) and Atlas Pipeline Partners, L.P. (APL).
Key Financial Metrics
This filing is a current report regarding a corporate transaction and does not contain financial statements, revenue, profit, cash flow, margin, debt, or liquidity data for the reporting period.
Material Changes
The primary material change is the execution of two merger agreements:
- GP Merger Agreement: Targa Resources Corp. will merge Atlas Energy, L.P. (ATLS) into a wholly-owned subsidiary, with ATLS continuing as a subsidiary of TRC.
- MLP Merger Agreement: Targa Resources Partners LP will merge Atlas Pipeline Partners, L.P. (APL) into a wholly-owned subsidiary, with APL continuing as a subsidiary of TRP.
Guidance, Outlook, and Risks
Outlook and Management Commentary: Management anticipates benefits from the proposed transactions, including future growth and potential dividends/distributions for the combined entities. Completion is subject to terms and conditions set forth in the agreements.
Risks and Contingencies: The filing includes a cautionary statement regarding forward-looking information. Key risks include:
- Weather, political, economic, and market conditions.
- Declines in the price and market demand for natural gas, natural gas liquids, and crude oil.
- Timing and success of business development efforts.
- Uncertainties outside the companies' control that could cause results to differ materially from expectations.
Regulatory Process: TRC and TRP plan to file registration statements on Form S-4 with the SEC, which will include joint proxy statements/prospectuses for shareholder and unitholder approval.
Investor Verification Checklist
- Review the definitive TRC joint proxy statement/prospectus and TRP proxy statement/prospectus once filed with the SEC for detailed transaction terms.
- Verify the specific exchange ratios and consideration offered to ATLS and APL unitholders in the upcoming S-4 filings.
- Assess the combined company's exposure to natural gas and crude oil price volatility as highlighted in the risk factors.
- Confirm the timeline for shareholder and unitholder votes required to approve the mergers.