Comstock Sells 27% Pinnacle Stake for $600M; Values Unit at $2.2B
Comstock Resources announced the sale of a 27% non-controlling common equity interest in its midstream subsidiary, Pinnacle Gas Services LLC, to Sixth Street for $600 million. This investment values Pinnacle at a $2.2 billion enterprise value, with Comstock retaining a 73% controlling interest valued at $1.6 billion. The proceeds were utilized to fully extinguish $445 million in preferred equity securities and all outstanding indebtedness at Pinnacle, significantly strengthening the balance sheet and reducing fixed charges by approximately $40 million annually. The transaction validates the value of Comstock's midstream infrastructure and Western Haynesville acreage, while ensuring Comstock maintains operational control.
Key Highlights
- Comstock sold a 27% non-controlling equity interest in its subsidiary, Pinnacle Gas Services.
- Sixth Street invested $600 million in Pinnacle Gas Services.
- The transaction values Pinnacle Gas Services at a $2.2 billion enterprise value.
- Comstock retains a 73% controlling interest in Pinnacle, valued at $1.6 billion.
- Proceeds were used to retire $445 million in preferred equity and all outstanding debt at Pinnacle.
- The deal is expected to reduce Pinnacle's fixed charges by approximately $40 million annually.
- Comstock's ownership in Pinnacle could increase to 80.5% upon Sixth Street achieving certain return hurdles.
Price Impact