Targa Resources Corp. to Acquire Permian Basin Gathering & Processing System for $1.25 Billion

Rhea-AI Summary

Targa Resources (NYSE: TRGP) will acquire Stakeholder Midstream for $1.25 billion in cash, expanding its Permian Basin gathering & processing footprint.

The assets include ~480 miles of gas pipelines, ~180 MMcf/d cryogenic processing and sour treating capacity, carbon capture activities generating 45Q tax credits, and a small crude gathering system across ~170,000 dedicated acres. The purchase price represents ~6x estimated 2026 unlevered adjusted free cash flow; Stakeholder is expected to generate ~$200 million of annual unlevered adjusted free cash flow with minimal capital needs.

The deal is expected to close in Q1 2026, funded from cash on hand and the existing $3.5 billion revolver; pro forma leverage is expected to remain within Targa’s 3.0–4.0x target range.

Positive

• Unlevered adjusted free cash flow of approximately $200 million annually
• Acquisition price of $1.25 billion equals ~6x 2026 estimated FCF
• Adds ~480 miles of natural gas pipelines and ~180 MMcf/d processing capacity
• 170,000 dedicated acres with long‑term fee contracts supporting stable volumes

Negative

• Transaction funded with cash and revolver, reducing near‑term liquidity availability

News Market Reaction

+0.78%

1 alert

+0.78% News Effect

On the day this news was published, TRGP gained 0.78%, reflecting a mild positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

Purchase price: $1.25 billion Valuation multiple: 6x Unlevered adjusted FCF: $200 million annually +5 more

8 metrics

Purchase price $1.25 billion Cash consideration for acquiring Stakeholder Midstream

Valuation multiple 6x Multiple of 2026 estimated unlevered adjusted free cash flow

Unlevered adjusted FCF $200 million annually Expected unlevered adjusted free cash flow from Stakeholder assets

Dedicated acreage 170,000 acres Long-term acreage dedications underpinning Stakeholder contracts

Pipeline length 480 miles Natural gas pipelines included in acquired Stakeholder system

Gas processing capacity 180 MMcf/d Cryogenic natural gas processing and sour treating capacity

Revolving credit facility $3.5 billion Existing revolving credit facility identified as funding source

Leverage target 3.0–4.0x Stated long-term leverage ratio target range pro forma for transaction

Market Reality Check

Price: $185.35 Vol: Volume 1,751,170 vs 20-da...

normal vol

$185.35 Last Close

Volume Volume 1,751,170 vs 20-day average 1,514,161, indicating modestly elevated trading activity. normal

Technical Price 185.73 is trading above the 200-day MA at 169.74, reflecting an established uptrend before this news.

Peers on Argus

Peers showed mixed moves: VG up 4%, TRP up 0.99%, while OKE and LNG were modestl...

Peers showed mixed moves: VG up 4%, TRP up 0.99%, while OKE and LNG were modestly negative, suggesting this acquisition headline is more company-specific than sector-driven.

Historical Context

5 past events · Latest: Dec 01 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Dec 01	Acquisition announcement	Positive	+0.8%	Announced $1.25B cash acquisition expanding Permian G&P and CCUS footprint.
Nov 06	Debt offering	Positive	+1.3%	Priced $1.75B senior notes to refinance higher-cost debt and fund uses.
Nov 05	Earnings and dividend	Positive	+5.3%	Reported record Q3 2025 results and flagged 25% dividend increase for 2026.
Oct 16	Dividend declaration	Positive	+1.6%	Declared $1.00 quarterly dividend and set date for Q3 earnings webcast.
Sep 30	Growth projects	Positive	+0.3%	Announced major Permian NGL pipeline and gas processing expansions.

Pattern Detected

Across the last five news events, including this acquisition, shares showed positive 24-hour reactions to capital markets, earnings, dividend, and growth project announcements.

Recent Company History

Over recent months, Targa announced multiple growth and financing milestones. On Sep 30, it detailed major Permian expansion projects. Subsequent dividend and earnings updates in October and November highlighted record Q3 2025 results and a planned $5.00 2026 dividend, with generally positive price reactions. Debt offerings totaling $1.75 billion followed. Today’s $1.25 billion Stakeholder Midstream acquisition continues this strategy of expanding Permian infrastructure and cash flow while managing leverage within a 3.0–4.0x target range.

Market Pulse Summary

This announcement outlines a bolt-on acquisition where Targa plans to acquire Stakeholder Midstream ...

Analysis

This announcement outlines a bolt-on acquisition where Targa plans to acquire Stakeholder Midstream for $1.25 billion in cash, adding 480 miles of pipelines, 180 MMcf/d of treating capacity, and CCUS assets. Management expects about $200 million of annual unlevered adjusted free cash flow and limited impact on leverage within a 3.0–4.0x range. Investors may track closing progress into Q1 2026, integration costs, volume trends on the 170,000 dedicated acres, funding via the $3.5 billion revolver, and future disclosure of realized returns.

Key Terms

unlevered adjusted free cash flow, cryogenic natural gas processing, carbon capture, ccus, +4 more

8 terms

unlevered adjusted free cash flow financial

"represents ~6 times 2026 estimated unlevered adjusted free cash flow"

Unlevered adjusted free cash flow is the cash a business generates from its normal operations after covering ongoing operating costs and investments in assets, measured before interest and debt payments and cleaned of one-time gains or losses. Investors view it like a household budget before mortgage payments — it reveals the company’s underlying cash-producing ability and makes comparisons across firms with different debt levels or unusual events easier for valuation and financial health checks.

cryogenic natural gas processing technical

"approximately 180 million cubic feet per day (“MMcf/d”) of cryogenic natural gas processing"

Cryogenic natural gas processing is a technique that cools raw gas to extremely low temperatures so different components freeze or liquefy and can be separated, much like freezing a fruit smoothie to pick out chunks of fruit. It produces high‑purity methane for pipeline or export and recovers valuable liquids such as ethane and propane, so it directly affects how much product a producer can sell, the cost of handling and transport, and project profitability and regulatory compliance.

carbon capture technical

"carbon capture (“CCUS”) activities generating 45Q tax credits"

Carbon capture is the process of removing carbon dioxide (CO2) from industrial emissions or the air and then storing it safely underground or turning it into useful products, like locking smoke from a factory into a sealed container or recycling it into new material. Investors care because the technology can cut a company’s reported emissions, create new revenue streams or credits, and reduce regulatory or climate-related risk, all of which affect future costs and valuations.

ccus technical

"carbon capture (“CCUS”) activities generating 45Q tax credits"

Carbon capture, utilization, and storage (CCUS) is a set of technologies that capture carbon dioxide emissions from power plants or industrial processes and either reuse the gas in products or inject it deep underground for long-term storage. For investors, CCUS matters because it can reduce regulatory and operational risks for emitters, create new revenue streams from reused carbon, and attract policy support or subsidies—like adding a filter and a recycling step to a factory’s emissions chain.

45q tax credits regulatory

"carbon capture (“CCUS”) activities generating 45Q tax credits"

45Q tax credits are a U.S. federal tax incentive that pays a company a set amount for each ton of carbon dioxide it captures and either stores permanently underground or converts into usable products. For investors, they act like a predictable per-ton rebate that lowers operating costs, improves project returns and cash flow, and reduces the financial risk of industrial or energy projects that invest in carbon-capture technology.

revolving credit facility financial

"its existing $3.5 billion revolving credit facility"

A revolving credit facility is a type of loan that a business can borrow from whenever it needs money, up to a set limit. It’s like having a credit card for companies—allowing them to borrow, pay back, and borrow again as needed, providing flexibility for managing cash flow or funding short-term expenses.

non-gaap financial measures financial

"Non-GAAP Financial Measures This press release includes adjusted free cash flow"

Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.

adjusted ebitda financial

"The Company defines adjusted EBITDA as Net income (loss) attributable"

Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.

AI-generated analysis. Not financial advice.

• $1.25 billion purchase price represents ~6 times 2026 estimated unlevered adjusted free cash flow
• Underpinned by long-term acreage dedications of ~170,000 acres and attractive fee-based contracts
• Stable volume profile with significant additional economic drilling opportunities
• Further enhances Targa’s leading sour gas treating capabilities and expands Targa’s gathering and processing (G&P) footprint in the Permian Basin
• Increases scale and cash flow with minimal impact to pro forma leverage
  

HOUSTON, Dec. 01, 2025 (GLOBE NEWSWIRE) --  Targa Resources Corp. (NYSE: TRGP) (“Targa” or the “Company”) announced today a definitive agreement under which a wholly-owned subsidiary of Targa will acquire Stakeholder Midstream, LLC (“Stakeholder”) for $1.25 billion in cash.

Stakeholder provides natural gas gathering, treating, and processing services and crude gathering and storage services in the Permian Basin, including approximately 480 miles of natural gas pipelines, approximately 180 million cubic feet per day (“MMcf/d”) of cryogenic natural gas processing and sour treating capacity, carbon capture (“CCUS”) activities generating 45Q tax credits, and a small crude oil gathering system. Stakeholder’s assets are anchored by long-term, fee-based contracts across approximately 170,000 dedicated acres underpinned by attractive acreage with activity that has exhibited very low decline rates, supporting a durable volume profile. Additionally, Stakeholder’s sour gas treating and CCUS activities complement Targa’s best-in-class treating and CCUS footprint in the Permian.

Targa expects Stakeholder to generate unlevered adjusted free cash flow of approximately $200 million annually with minimal capital needs, very low integration costs and attractive acreage with a stable volume profile.

“This acquisition is a nice bolt-on asset that has meaningful free cash flow supported by a stable to modestly growing volume profile with minimal capital needs and executed at an attractive valuation. We believe this transaction is a continuation of our strategy of identifying opportunities to create shareholder value with balance sheet strength,” said Matt Meloy, Chief Executive Officer of Targa.

“We are very familiar with the acquired assets and have strong relationships with some of the largest producers on the system. Targa’s organic growth opportunity set coupled with this accretive bolt-on transaction positions us well to enhance our already strong growth profile,” added Meloy.

“From our formation, Stakeholder set out to create midstream infrastructure to service one of the nation’s leading energy-producing regions. It has been a pleasure and an honor to partner with first-class team members, customers, the community and vendors who contributed their expertise, dedication and creativity to the overall success of the Stakeholder platform and the broader San Andres play,” said Gaylon Gray, Co-Chief Executive Officer of Stakeholder.  

“We would like to recognize our financial sponsor, EnCap Flatrock Midstream, and our board of directors for their partnership and ongoing support since we started this journey. The Stakeholder team is excited to watch the continued development and growth of its platform going forward under Targa’s leadership.”

Additional Information and Advisors

Completion of this transaction is subject to customary closing conditions, including regulatory approvals. The transaction is expected to close in the first quarter of 2026. The Company expects to fund the acquisition using its strong liquidity position, including cash on hand and its existing $3.5 billion revolving credit facility. Pro forma for the transaction, the company expects limited impact to its leverage ratio and will remain within its long-term leverage target range of 3.0 to 4.0 times.

RBC Capital Markets is serving as Targa’s financial advisor, and Latham & Watkins LLP is acting as Targa’s legal counsel on the transaction.

Jefferies is acting as the exclusive financial advisor to Stakeholder in connection with this transaction. Stakeholder’s legal advisors are Willkie Farr & Gallagher and Clifford Chance.

About Targa Resources Corp.

Targa Resources Corp. is a leading provider of midstream services and is one of the largest independent infrastructure companies in North America. The Company owns, operates, acquires and develops a diversified portfolio of complementary domestic infrastructure assets, and its operations are critical to the efficient, safe and reliable delivery of energy across the United States and increasingly to the world. The Company’s assets connect natural gas and NGLs to domestic and international markets with growing demand for cleaner fuels and feedstocks.

Targa is a FORTUNE 500 company and is included in the S&P 500.

For more information, please visit the Company’s website at www.targaresources.com.

Non-GAAP Financial Measures

This press release includes adjusted free cash flow, which is a non-GAAP financial measure.

The Company defines adjusted EBITDA as Net income (loss) attributable to Targa Resources Corp. before interest, income taxes, depreciation and amortization, and other items that the Company believes should be adjusted consistent with the Company’s core operating performance. The Company defines adjusted cash flow from operations as adjusted EBITDA less cash interest expense on debt obligations and cash tax (expense) benefit. The Company defines adjusted free cash flow as adjusted cash flow from operations less maintenance capital expenditures and growth capital expenditures, net of any reimbursements of project costs and contributions from noncontrolling interests, and including contributions to investments in unconsolidated affiliates. Adjusted free cash flow is a performance measure used by the Company and by external users of the Company’s financial statements, such as investors, commercial banks and research analysts, to assess the Company’s ability to generate cash earnings (after servicing the Company’s debt and funding capital expenditures) to be used for corporate purposes, such as payment of dividends, retirement of debt or redemption of other financing arrangements.

Forward-Looking Statements

Certain statements in this release are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future, are forward-looking statements, including statements regarding our projected financial performance, capital spending, and payment of future dividends. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties, factors and risks, many of which are outside the Company’s control, which could cause results to differ materially from those expected by management of the Company. Such risks and uncertainties include, but are not limited to, actions taken by other countries with significant hydrocarbon production, weather, political, economic and market conditions, including a decline in the price and market demand for natural gas, natural gas liquids and crude oil, the timing and success of our completion of capital projects and business development efforts, the completion of the acquisition of Stakeholder, which may not be completed on a timely basis or at all, expected benefits relating to the acquisition of Stakeholder and their impact on the Company’s results of operations, the expected growth of volumes on our systems, the impact of significant public health crises, commodity price volatility due to ongoing or new global conflicts, the impact of disruptions in the bank and capital markets, changes in laws and regulations, particularly with regard to taxes, tariffs and international trade, and other uncertainties. These and other applicable uncertainties, factors and risks are described more fully in the Company’s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K, and any subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The Company does not undertake an obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Targa Investor Relations
InvestorRelations@targaresources.com
(713) 584-1133

FAQ

What is the purchase price for Stakeholder and how does it value TRGP?

Targa agreed to acquire Stakeholder for $1.25 billion, valuing the business at about 6x estimated 2026 unlevered adjusted free cash flow.

When is the TRGP acquisition of Stakeholder expected to close?

The transaction is expected to close in Q1 2026, subject to customary closing conditions and regulatory approvals.

What assets and capacity does Targa gain in the Permian with this TRGP deal?

Targa acquires ~480 miles of gas pipelines, ~180 MMcf/d cryogenic processing and sour treating capacity, CCUS activities with 45Q tax credits, and a small crude system.

How will Targa (TRGP) fund the $1.25 billion acquisition?

Targa expects to fund the purchase using cash on hand and its existing $3.5 billion revolving credit facility.

What is the expected cash flow impact of the Stakeholder acquisition on TRGP?

Stakeholder is expected to generate roughly $200 million of unlevered adjusted free cash flow annually with minimal capital needs.

Will the acquisition materially change Targa’s leverage ratio (TRGP)?

Targa expects limited impact to pro forma leverage and to remain within its long‑term target range of 3.0–4.0x.