Black Stone Minerals LP (NYSE:BSM) Raises $427.5 million Through Initial Public Offering

Houston-based Black Stone Minerals LP (NYSE:BSM) has raised $427.5 million through a fresh IPO. As per the reports, the company has offered 22.5 million units, each of which are priced at $19 each. Market experts call the offered price at the low end of its expected range.

Where Will It Be Used:

The company plans to use the raised amount through this initial public offering for repaying outstanding indebtedness under its credit facility. The company has also facilitated underwriters by allowing them to buy up to 3.38 million additional shares at the same price. In case the underwriters plan to exercise this option, Black Stone will use the additional proceeds to fund its future capital expenditures and repay the remaining debt.

All the common units that will be owned by the investors represent 11.3% limited partner interest in Black Stone. If underwriters exercise their rights and execute an additional purchase, this limited partner interest may rise to 13%. The company expects the offering to get closed on May 6, 2015, pursuant to the fulfillment of all the customary requirements.

Black Stone is a Master Limited Partnership firm based in Houston. The first Master Limited Partnership to go public in 2015 was Columbia Pipeline Partners LP, based in Houston.

As per the reports, the upsized IPO of Columbia Pipeline raised over $1.08 billion proceeds. In the case of Black Stone, the shares have been priced at lower than the expected rate while the shares of Columbia Pipeline were priced more than the market expectations.

Black Stone Minerals LP (NYSE:BSM) has decided to appoint Barclays, Citigroup, Bank of America Merrill Lynch, Wells Fargo Securities and Credit Suisse as the joint book-running managers for this IPO. The company has also appointed JPMorgan, Raymond James, Morgan Stanley, Simmons & Co. International and Scotia Howard Weil as the co-managers for this offering.

About the Author

Erica is a graduate of New York University's school of Journalism. She joined US Markets Daily as a general assignment reporter in January of 2008.

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