Summit Midstream Corp (NYSE:SMC), which has seen its stock surge 111% year-to-date according to InvestingPro data, announced today that during a special meeting held on Friday, its stockholders approved a significant stock issuance to Tall Oak Midstream Holdings, LLC.
The approval paves the way for the issuance of up to 7,471,008 shares of Class B common stock and an equal number of common units representing limited partner interests in Summit Midstream Partners, LP.
The stock issuance is part of a compliance measure with the New York Stock Exchange Listed Company Manual Section 312.03, following a Business Contribution Agreement dated October 1, 2024. The transaction involves potential further issuance of the underlying shares of Company Common Stock upon redemption and exchange of the Class B Common Stock and Common Units.
The vote demonstrated overwhelming support from the stockholders, with 8,154,391 votes in favor, 5,209 against, and 12,457 abstentions. The stockholders also voted on an Adjournment Proposal, which would allow the special meeting to be adjourned to a later date if necessary. This proposal also passed with 8,016,331 votes for, 150,216 against, and 5,510 abstentions.
The special meeting was attended by approximately 76.7% of the voting power of the shares entitled to vote, meeting the quorum requirement for the proceedings. This high turnout indicates strong stockholder engagement in the decision-making process for the company's future actions.
With an EBITDA of $178.33 million in the last twelve months and a current InvestingPro Financial Health rating of FAIR, the company's strategic decisions are being closely monitored by investors.
Summit Midstream Corp, headquartered in Houston, Texas, is a company operating in the natural gas transmission sector. This strategic move involving Tall Oak is expected to contribute to Summit's business operations, although the specific implications of the stock issuance are yet to unfold.
The information disclosed is based on a press release statement and offers a factual outline of the events and decisions made during the special meeting. Summit Midstream Corp has not provided any additional commentary on the future impact of this stockholder decision.
In other recent news, Summit Midstream Corporation has announced significant developments, including the acquisition of Tall Oak Midstream Operating, LLC and its subsidiaries. This deal, expected to close in the last quarter of 2024, will expand Summit's operational reach into the Arkoma Basin.
The acquisition includes a $155 million upfront cash payment and approximately 7.5 million shares of Summit's Class B common stock. The agreement will also bring over 440 million cubic feet per day of processing capacity and over 400 miles of pipelines to Summit's portfolio.
Simultaneously, Summit Midstream Partners, LP, has undergone a corporate reorganization, transitioning from a master limited partnership to a C corporation. This move aims to simplify the company's structure and potentially lower its long-term cost of capital. In addition, the company has launched a tender offer to repurchase up to $215 million of their 8.500% Senior Secured Second Lien Notes due 2026.
The company also reported strong Q1 results, with a net income of $132.9 million and adjusted EBITDA of $70.1 million. Following these financial developments, Summit divested its Northeast segment assets for approximately $700 million, indicating a strategic shift towards mergers and acquisitions in the Rockies and Permian segments. These recent developments underline Summit's focus on operational efficiency and shareholder value.
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