Metalmark in $675m natural gas exit(4)

Metalmark has sold Cantera Natural Gas, a portfolio company it created through a series of acquisitions, to Copano Energy.

New York-based Metalmark Capital has sold its stake in Denver-based natural gas pipeline operator Cantera Natural Gas to Copano Energy for $675 million (€496 million) including debt.

Metalmark, which spun out of Morgan Stanley in 2004, created Cantera through a series of acquisitions. In May 2000, Metalmark bought the gas gathering and processing assets of TXU Processing Company from TXU Corporation as an add-on acquisition. Metalmark then expanded the Cantera further by buying the gas gathering and processing assets of TBI Field Services from Tom Brown in June 2001, and then CMS Field Services from CMS Energy in July 2003.

Metalmark subsequently sold off some of the assets of the new entity. Enbridge Energy Partners bought Cantera Resources in 2004 for $247 million, and Penn Virginia Resource Partners bought some of the assets of Cantera Natural Gas in 2005 for $191 million.

Copano will acquire the remaining assets of Cantera Natural Gas: a 51 percent stake in the Bighorn Gas Gathering pipeline system and a 37.04 percent stake in Wyoming pipeline system For Union Gas Gathering.

The deal is expected to close in the fourth quarter of 2007. Bank of America provided a $550 million senior revolving credit facility for the deal.