Crosstex Energy entered into a definitive agreement to sell its Southern United States assets for $220 million to Southcross Energy, a portfolio investment of Charlesbank Capital Partners. The assets are valued at $200 million and include operations in Mississippi, Alabama and South Texas. Goldman Sachs is the exclusive financial advisor to Crosstex in the transaction, which is expected to close on July 31. Southcross and Crosstex are both operators of natural gas midstream operations.
Over the last two and half years, private equity investors have invested in 22 other companies operating pipelines and gas processing facilities, according to the PitchBook Platform. Eighteen of the deals were in 2007, with Southcross Energy's acquisition the first of 2009, showing that the sector fell out of favor with private equity investors as energy prices peaked then fell. With energy prices stabilizing and even rising, this deal may be the first of many in the coming months. Look for firms like ArcLight Capital Partners and Tenaska Capital Management, which made multiple investments in midstream operators, to start making investments again soon.