SCHEDULE 13D/A: I Squared Capital Affiliates Reduce Kinetik Holdings Stake to 34.4% Following Significant Share Sale

Affiliates of I Squared Capital, including ISQ Global Fund II GP, LLC, have updated their beneficial ownership in Kinetik Holdings Inc., reporting a 34.4% stake after selling over 3.9 million shares.

Summary

• The filing is Amendment No. 9 to Schedule 13D, updating beneficial ownership information for Kinetik Holdings Inc. (formerly Altus Midstream Company).
• The Reporting Persons, including ISQ Global Fund II GP, LLC, I Squared Capital, LLC, ISQ Holdings, LLC, Sadek Wahba, and Gautam Bhandari, collectively beneficially own 30,134,083 shares of Kinetik Holdings Inc. Class A Common Stock.
• This ownership represents approximately 34.4% of the Class A Common Stock outstanding, calculated based on 60,078,190 shares outstanding as of February 21, 2025, plus 27,489,164 shares issuable upon redemption of Common Units.
• The beneficial ownership comprises 1,044,520 shares of Class A Common Stock, 27,489,164 Common Units (redeemable for Class A shares or cash), and 1,600,399 shares of Class A Common Stock acquirable under the Contribution Allocation Agreement.
• On March 4, 2025, Buzzard Midstream LLC, an entity affiliated with the Reporting Persons, sold 3,952,431 shares of Class A Common Stock at a price of $55.63 per share.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the significant share sale by a major beneficial owner, which can be interpreted as a reduction in their stake and potentially a negative signal to the market, despite the remaining large ownership.

Positives

• The Reporting Persons, led by I Squared Capital, maintain a substantial beneficial ownership of 34.4% in Kinetik Holdings Inc., indicating continued significant investment and influence.

Negatives

• A significant block of 3,952,431 shares of Class A Common Stock was sold by Buzzard Midstream LLC, an entity affiliated with the Reporting Persons, on March 4, 2025, at $55.63 per share, which could signal reduced conviction or a liquidity event by a major holder.

Risks

• The Reporting Persons explicitly disclaim being a 'group' with Blackstone, Apache, and their affiliates for Section 13(d) purposes, which could imply potential for independent actions by these large holders.
• Further sales by large institutional holders could exert downward pressure on the stock price.

Future Outlook

The document does not provide any forward-looking statements or guidance regarding the company's future performance or strategic direction, focusing solely on beneficial ownership changes.

Industry Context

This filing is an ownership disclosure and does not provide specific operational or strategic updates that would allow for a detailed analysis of its relation to broader industry trends or competitors. It primarily reflects an investment group's position in a midstream company.

Legal Proceedings

• None of the Reporting Persons have been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) in the last five years.
• None of the Reporting Persons have been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction that resulted in a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws in the last five years.

Related Party Transactions

• Conversion of 234 Consideration Allocation Rights into shares of Class A Common Stock on April 25, 2024, and October 24, 2024, without additional consideration, pursuant to the Consideration Allocation Agreement.
• Beneficial ownership includes 27,489,164 Common Units and an equal number of paired shares of Class C Common Stock, which may be redeemed by the holder for shares of Class A Common Stock on a one-for-one basis (or, at the Partnership's option, an equivalent amount of cash).

Stakeholder Impact

• Shareholders may react to the news of a significant block sale by a major institutional investor, potentially influencing market perception and share price.

Key Dates

Recommendation

Keywords

Kinetik Holdings, SEC filing, Schedule 13D, beneficial ownership, Class A Common Stock, I Squared Capital, share sale, institutional investor, midstream, equity stake