Tidewater Midstream Moves to Acquire Tidewater Renewables in All-Share Deal

Key Points

• Tidewater Midstream plans to acquire the Tidewater Renewables shares it does not already own in an all-share deal, offering 0.88 Tidewater Midstream shares for each Tidewater Renewables share. Closing is targeted for approximately Dec. 18, 2026, pending shareholder, court and TSX approvals.
• Existing Tidewater Midstream shareholders are expected to own roughly 67% of the combined company, with Tidewater Renewables’ minority shareholders holding about 33% on a basic-share basis. Both companies’ independent committees unanimously recommended the transaction, and significant shareholders have signed support agreements.
• Management expects the combination to simplify governance, reduce duplicated costs, improve liquidity and financial flexibility, and unite midstream infrastructure with low-carbon fuels assets. Near-term free cash flow will be directed toward debt reduction while the company targets net debt-to-adjusted EBITDA of approximately 1.5 to 2.5 times.

Tidewater Midstream and Infrastructure TSE: TWM and Tidewater Renewables announced a proposed all-share combination that would consolidate the companies under a single publicly traded corporate structure, with an expected closing date of about Dec. 18, 2026, subject to shareholder, court and Toronto Stock Exchange approvals.

Under the proposed arrangement, Tidewater Midstream would acquire all Tidewater Renewables shares that it does not already own. Tidewater Renewables shareholders would receive 0.88 of a Tidewater Midstream share for each Tidewater Renewables share held.

Jeremy Baines, chief executive officer of Tidewater Midstream, said the companies believe the transaction would simplify governance and strengthen the combined platform's financial and operating flexibility.

“The transaction will simplify the organization under a unified governance structure, improve financial flexibility, increase scale and liquidity, and create a stronger platform for long-term shareholder value,” Ian Quartly, Tidewater Midstream’s chief financial officer, said during a conference call.

Ownership and Approvals

On a basic-share basis, existing Tidewater Midstream shareholders are expected to own about 67% of the combined company, while former Tidewater Renewables minority shareholders are expected to own approximately 33%. On a fully diluted basis, those ownership levels are expected to be about 69% and 31%, respectively.

Baines said the consideration offered exceeds the exchange ratio implied by the top end of the fair market values determined by KPMG in its independent valuation of the Tidewater Renewables and Tidewater Midstream shares.

The special committees of independent directors at both companies unanimously recommended the transaction, and the non-conflicted directors of each company approved it. The arrangement will still require minority shareholder approval at both companies, as well as court and TSX approvals.

Shareholders representing about 38% of Tidewater Renewables shares eligible to vote for the required minority approval, along with shareholders representing about 41% of outstanding Tidewater Midstream shares, have entered voting and support agreements backing the transaction, according to management.

• Management information circulars are expected to be mailed around Nov. 20, 2026.
• Shareholder meetings are expected to take place Dec. 14, 2026.
• The companies expect to seek a final court order and other required approvals before closing around Dec. 18, 2026.

Strategic Rationale

Baines said the companies are already closely connected operationally, particularly through the Prince George Refinery and the adjacent renewable diesel complex. The combined business would have one board, one management structure and a unified corporate strategy.

The company expects the larger public float and simplified investment proposition to support trading liquidity, institutional interest and access to capital. Management also cited potential savings from eliminating duplicate public-company expenses and winding down the intercompany shared-services structure, as well as potential tax synergies.

The combined company would include Tidewater Midstream’s gas processing, natural gas liquids and refining infrastructure alongside Tidewater Renewables’ low-carbon fuels platform. Baines said the assets are positioned to benefit from regional and continental tailwinds in natural gas and NGL markets, as well as supportive policy conditions for low-carbon fuels.

Following a closing, Tidewater Midstream’s existing management team, including Baines and Quartly, would continue leading the combined company.

Capital Structure and Operating Priorities

Management said it intends to maintain a long-term run-rate net debt-to-adjusted EBITDA target of approximately 1.5 times to 2.5 times. Near-term free cash flow is expected to be directed toward debt repayment, according to Baines.

In connection with the transaction, the companies have received fully underwritten commitments from National Bank of Canada Capital Markets and ATB Financial for secured credit facilities intended to refinance existing debt and support general corporate purposes, contingent on completion of the arrangement.

After closing, management said its priorities would include preserving balance-sheet flexibility, pursuing growth and margin expansion, optimizing the portfolio and managing risk. The company identified opportunities to raise utilization of existing assets, expand gas processing, sulfur handling and downstream services, and pursue selective brownfield, tuck-in and greenfield investments that meet return thresholds.

Management also said it would continue assessing asset performance and strategic fit, potentially redeploying capital from lower-return assets to higher-value opportunities. The combined company plans to continue employing a disciplined hedging strategy to mitigate commodity-price and margin volatility and improve cash-flow visibility.

The companies did not take questions during the call because management said it was in a blackout period ahead of third-quarter results scheduled for release on Nov. 12, 2026.

About Tidewater Midstream and Infrastructure (TSE:TWM)

Tidewater Midstream and Infrastructure Ltd is a Canadian company that is engaged in providing midstream infrastructure and a natural gas storage facility. It mainly focuses on the purchase, sale, and transportation of Natural Gas Liquids (NGLs) such as propane and natural gasoline throughout North America and export to premium markets. The business activities of the company include gathering, processing, and transportation relates to raw gas gathering systems, processing plants and pipelines, NGL marketing and Extraction, refined products, and other activities.

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