ONEOK to Acquire Permian Assets for $4.43B

Acquisition Overview

ONEOK (NYSE: OKE) announced a definitive agreement to acquire Brazos Midstream’s Permian Midland Basin natural‑gas gathering and processing assets for cash consideration of $4.425 billion. The assets comprise roughly 600,000 dedicated acres under long‑term fixed‑fee contracts, with a weighted‑average remaining term exceeding 12 years.

Funding Structure

The transaction will be financed through a $9 billion non‑voting minority equity investment from funds managed by Apollo (NYSE: APO). The Apollo investment carries an internal rate of return capped at 7.0% for the first nine years, will be recorded as a noncontrolling interest within permanent equity under GAAP, and grants Apollo a Class B interest in a newly formed holding company without board representation or liquidation preference. ONEOK intends to allocate $5 billion of the proceeds to extinguish existing debt.

Valuation and Synergies

The purchase price represents approximately 7.5 times estimated 2027 EBITDA, inclusive of about $80 million of full‑year synergies, and roughly 6.0 times estimated 2028 EBITDA. ONEOK stated the acquisition is expected to be immediately accretive to earnings per share and free‑cash‑flow per share.

Operational Impact

Following completion of the Cassidy II processing plant, anticipated in the third quarter of 2027, the combined system will feature about 700 miles of gathering infrastructure and 1.2 billion cubic feet per day (bcf/d) of processing capacity. This addition more than doubles ONEOK’s Midland Basin processing capacity to approximately 2.3 bcf/d.

Debt Reduction and Leverage

By retiring roughly $5 billion of debt, ONEOK projects its pro‑forma 2027 leverage to fall to about 3.25 times debt‑to‑EBITDA.

Closing Timeline and Conditions

The acquisition is expected to close in the fourth quarter of 2026, subject to customary closing conditions including Hart‑Scott‑Rodino Act clearance. The minority equity investment is slated to close in the first half of September 2026.

Advisory Parties

Barclays acted as sole financial advisor on the acquisition and as lead financial advisor on the equity investment, while RBC Capital Markets advised Apollo.