Houston-based energy-focused private-equity firm Quintana Capital Group has acquired certain Class A membership interests in the general partner of Genesis Energy LP, Houston, (Amex: GEL) held by Denbury Resources Inc., Dallas, (NYSE: DNR) for approximately $85 million in cash.
Quintana and its co-investors now control Genesis’ general partner, and members of the Davison family and Genesis’ management team will be minority investors. Certain members of the Davison family own approximately 30% of Genesis’ outstanding common units and Denbury will continue to own approximately 10% of Genesis’ outstanding common units.
Genesis chief executive Grant Sims says, “We are very pleased to receive such a substantial endorsement from respected and venerable energy investors like Quintana and the Davison family. Both have a long history of investing in the energy industry and a wide breadth of commercial relationships. It is anticipated they will further enhance Genesis’ ability to meet its objective of delivering long-term growth for the partnership. We currently do not expect to see any significant changes in our day-to-day operations as a result of this transaction. We will continue to work hard to create value for our unit holders by providing our customers quality services from our increasingly integrated set of assets.”
Quintana managing partner Corbin J. Robertson Jr. says, “We are very excited to partner with the Davison family and management to help continue to grow Genesis. As one of Quintana’s primary vehicles for investing in the midstream segment of the energy sector, Genesis will have the opportunity to leverage off of the reputations, contacts, access to capital and deal flow of the Quintana-affiliated enterprises.”
Denbury CEO Phil Rykhoek says, “We have been successful in partnering with Genesis management to build an increasingly integrated midstream service provider focused in the Gulf Coast region. Our investment in Genesis, which began with a $2.2-million purchase of the general partner in 2002, has grown to a much larger value today, and we plan to utilize the net proceeds of approximately $85 million from the sale of our Class A interests in the general partner to help finance our pending strategic acquisitions of Encore Acquisition Co. and the Conroe Field.”
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