Private Company Story
In November 2013, Azure Midstream, an Energy Spectrum backed management team, closed simultaneously on the acquisition of TGGT Holdings (a midstream JV between EXCO and Shell) and Tenaska’s East Texas Gathering. The new combined company, Azure Midstream Energy, LLC (“AME”), operated:
- the Legacy System in Harrison and Panola Counties,
- the Holly System in Caddo, DeSoto and Red River Parishes, and
- the combined Shelby/ETG System in Shelby, San Augustine, Nacogdoches and Angelina Counties.
The initial cash flows for AME were heavily reliant upon the Haynesville activity dedicated to the systems, so management immediately began an efficiency focus and an outward basin/processing M&A strategy to fight the declining activity in the region.
In February 2015, AME closed on a reverse merger with Marlin Midstream, LLC. By contributing the Legacy System, and subsequently the ETG System to the newly formed public partnership, AME continued to hold a set of private assets generating more than $70 million in annual EBITDA as potential dropdown inventory for the partnership.