While not a done deal, Blackwater Midstream, (OTC:BWMS) a third party holder and manager of chemical, agricultural, and petroleum liquids, advised its shareholders to approve its acquisition by ArcLight Capial Partners.
ArcLight is a privately held equity investment firm specializing in energy concerns. The deal, once consummated and finalized, will involve just over $44 million in cash and see shareholders of Blackwater Midstream receiving $0.64 for each outstanding share. Convertible note holders will also be considered individually, based on the amount of shares they are entitled to. If the acquisition goes through, sometime in the fourth quarter of this year, BWMS will no longer be a ticker symbol, but wholly privately owned.
This is not to say that Blackwater should be overlooked while considering investment opportunities. Today’s close of $0.61 obviously represents an opportunity to cash in on a sure thing if Monday’s opening allows.
OK, perhaps not a sure thing. But the Board of Directors of Blackwater unanimously approved the deal and suggested shareholders do the same in the vote that will follow its next proxy statement. There is nothing to suggest that the shareholder vote will hold up this acquisition.
The acquisition price of $0.64 represents a premium of nearly 30% over the last 30 days, and 32% above the last quarter of trading ending yesterday.
Blackwater’s customers, and its 1.1 million barrel storage capacity in Georgia, Maryland, and Louisiana, will not, in theory, be affected by this announcement – “in theory” being the operative words. Expect a Monday rise and set your alarm clocks accordingly.
Figuratively wiping the sweat from his brow, the CEO of Blackwater and its $8 million of debt said this, “We are excited to have reached this agreement which provides excellent value to our stockholders and positions Blackwater for long term success. I am pleased with the accomplishments of our employees and leadership over the past four years. Our full management team is committed to remaining with the company, which will allow us to continue serving our customers without interruption as we transition through this change of ownership.”
This is a fire sale, though if traders see any suggestion that the acquisition will not be approved by shareholders, you will see huge swings and daily volume numbers from Blackwater soon.