Item 1.01 Entry into a Material Definitive Agreement.
On May 29, 2024, Hess Midstream LP., a Delaware limited partnership (the “Company”), Hess Midstream GP LP, a Delaware limited partnership and the general partner of the Company (the “General Partner”), Hess Midstream GP LLC, a Delaware limited liability company and the general partner of the General Partner, GIP II Blue Holding, L.P., a Delaware limited partnership (the “Selling Shareholder”), and J.P. Morgan Securities LLC, as underwriter (the “Underwriter”), entered into an Underwriting Agreement (the “Underwriting Agreement”), pursuant to which the Selling Shareholder agreed to sell to the Underwriter, and the Underwriter agreed to purchase from the Selling Shareholder, subject to and upon the terms and conditions set forth therein, 10,000,000 Class A shares representing limited partner interests in the Company (the “Class A Shares”) at a price of $34.025 per Class A Share (the “Secondary Offering”). The Selling Shareholder completed the sale of the Class A Shares on May 31, 2023. The Selling Shareholder received net proceeds from the Secondary Offering of $340,250,000. The Company did not receive any proceeds in the Secondary Offering.
Pursuant to the terms of the Underwriting Agreement, the Selling Shareholder also granted the Underwriter an option exercisable for 30 days to purchase up to an additional 1,500,000 Class A Shares at the same price per share as the Class A Shares. The Underwriter subsequently notified the Selling Shareholder of its intent to exercise such option in full, and the Selling Shareholder expects to complete the sale of an aggregate 1,500,000 Class A Shares (the “Additional Shares”) to the Underwriter on June 3, 2024. The Selling Shareholder expects to receive net proceeds from the sale of the Additional Shares of $51,037,500. The Company will not receive any proceeds in connection with the sale of the Additional Shares.
The Underwriting Agreement includes customary representations, warranties and covenants by the Company and Selling Shareholder and customary conditions to closing, obligations of the parties and termination provisions. Additionally, under the terms of the Underwriting Agreement, the Company and the Selling Shareholder have agreed to indemnify the Underwriter against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”), or to contribute to payments the Underwriter may be required to make in respect of these liabilities.
Pursuant to the Underwriting Agreement, the Company, the Selling Shareholder and Hess Investments North Dakota LLC have agreed not to sell or otherwise dispose of any Class A Shares held by them for a period ending 60 days after the date of the Underwriting Agreement without first obtaining the written consent of the Underwriter, subject to certain exceptions.
The Secondary Offering was made pursuant to the Company’s effective shelf registration statement on Form S-3 (Registration No. 333-270028), a base prospectus dated February 27, 2023, included as part of the registration statement, and a prospectus supplement, dated May 29, 2024, filed with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act.
The Underwriting Agreement is attached hereto as an exhibit to provide interested persons with information regarding its terms, but is not intended to provide any other factual information about the Company or the Selling Shareholder. The representations, warranties and covenants contained in the Underwriting Agreement were made only for purposes of the Underwriting Agreement as of specific dates indicated therein, were solely for the benefit of the parties to the agreement, and may be subject to limitations agreed upon by such parties.
The foregoing description of the terms of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to the Underwriting Agreement which is filed as Exhibit 1.1 to this Current Report on Form 8-K and incorporated by reference herein.
The legal opinion of Latham & Watkins LLP relating to the validity of the Class A Shares is attached as Exhibit 5.1 to this Current Report on Form 8-K.
Item 8.01 Other Events.
On May 29, 2024, the Company issued press releases announcing the launch and pricing of the Secondary Offering. Copies of these press releases are attached hereto as Exhibits 99.1 and 99.2, respectively, and are each incorporated herein by reference.
