Blank Check TPG Energy Division sets the Pace with $600 million IPO

TPG Pace Group was founded in 2015 as a capital base for the TPG Corporation. The Pace Group acted as a trust to fund the corporation’s expansion into the global market. With its large capital base and considerable network, the TPG Pace Group has been responsible for the formation of several TPG spinoffs over the years. One of these spin-offs is the TPG Pace Energy Holdings Corp.

TPG Pace Energy Holdings Corp. is a Fort Worth, Texas-based company that deals in the acquisition of companies that operate within the energy industry or are related to it. Basically, it buys up these companies and where it can’t, it buys their assets instead. Sometimes Pace Energy could even go as far as purchasing equity in firms that it’s interested in. TPG Pace Energy was founded in 2017 so it’s still in its early stages of development. The company is chaired by CEO Stephen Chazen, a man with vast experience in the energy sector.

Pace Energy was off to a good start on Friday when its shares hit the NYSE under the stock label TPGEU. The company had stated that intended to sell off its shares at a fixed price of $10. On Friday, Pace Energy traded 60 million of its common stock at the denoted price on average to bring in $600 million on its first day in the market. The company’s stock opened at $10.10 per share and closed 40% higher at $10.14.  and that’s not the best part. That part is that Pace Energy still has some shares that insiders can bid on. If the insiders exercise that option, who knows how many more millions the company could be looking at.

The lead underwriters for the issuance, who have up to45 days to buy up the extra stock, are Goldman Sachs & Co. LLC, Credit Suisse, Citigroup Global Markets Inc. and Deutsche Bank Securities. Tudor Pickering Holt & Co. still has the option because it co-managed the deal.

The proceeds from the IPO will enable Pace Energy to expand its base of operations. The money will go into researching energy companies that would benefit from cooperation with the corporation. One identifies Pace Energy could then purchase shares in the energy company as a means of generating revenue. Similarly, the energy blank check acquisitions firm could merge with or take over struggling energy-related enterprises. These companies could then be revived with TPG Pace Energy Holdings’ proceeds from the IPO and TPG Pace Group.

According to the company, the criteria for identifying potential partner firms would be three. The first is that they would have to be in the energy business. Pace Energy gave no specifications as to which sectors of the industry. Secondly, the company should have the potential to succeed in the public market. The final Pace Energy stipulation is that the firm it would acquire should have high returns generation capacities when provided with an infusion of capital and exposure to the market. Pace Energy will then generate its revenue from shareholding dividends while promoting growth within the US energy industry.