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Copano Energy raises USD300m from funds managed by TPG Capital

Copano Energy has issued USD300m of convertible preferred equity to an affiliate of TPG Capital, a private investment firm. 

The series A preferred units were priced at USD29.05 per unit, a ten per cent premium to the 30-day volume weighted average price of Copano’s common units as of 19 July 2010. 

The preferred units are entitled to in-kind quarterly distributions of USD0.72625 per unit for the first three years, and are generally convertible into common units on a one-for-one basis after 21 July 2013. 

Copano intends to use the proceeds from the private placement to fund its Eagle Ford Shale expansion strategy and other growth initiatives in Texas and Oklahoma.

In connection with the equity issuance, Copano has expanded its board of directors from seven to eight members and has appointed Michael G. MacDougall, a TPG partner, as a director. MacDougall will stand for election at Copano’s 2011 annual meeting of unitholders. 

"We are pleased to enter into this strategic capital partnership with TPG, a global private investment firm with significant financial resources and a long-term investment perspective," says Bruce Northcutt, Copano Energy’s president and chief executive officer. "TPG shares our vision for the growth of our business. We are confident that, with TPG’s support of our Eagle Ford Shale expansion plans and other capital initiatives, this transaction will further our objective to increase the scale and stability of our cash flow."

MacDougall adds: "Copano is a highly successful company with a strong track record of profitable growth. We have worked closely with the senior management team over the last year to understand the company’s attractive growth opportunities, including the expansion of Copano’s existing capacity to serve producers in the Eagle Ford Shale, and we are excited to provide a long-term source of flexible capital to accelerate development of these opportunities. We look forward to partnering with Bruce Northcutt and his talented team for many years to come."

BofA Merrill Lynch acted as exclusive placement agent to Copano in connection with the transaction. Morgan Stanley acted as exclusive financial adviser to Copano.

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