Lessons from Going Private, Public, and Private Again

How Niska Gas Storage Partners redefined and improved itself after sales, mergers, and IPOs

When Jason Dubchak joined Niska Gas Storage Partners in 2001, the publicly traded entity was known as Alberta Energy Company. A year later, Alberta Energy merged with PanCanadian Energy to form EnCana Corporation.

Since then, he’s seen the natural gas storage business go from public to private to public again. Niska is now part of a new merger that will make it private once more, and Dubchak has the experience to take on the transition yet again.

In 2006, EnCana saw record values for the natural gas storage business and determined that it was the right time to exit the industry. It sold its natural gas storage business unit for $1.5 billion to a private equity energy fund.

The newly formed private company, Niska Gas Storage, housed EnCana’s former gas storage assets. It also inherited the need for a number of functions that were previously handled at EnCana’s corporate level.

As a stand-alone private company, Niska suddenly had to handle a host of new functions: treasury, human resources, information technology, finance, accounting, and even tax. “It was a significant short-term challenge,” says Dubchak. “Overnight, we needed to create a fully operational company with many new functional groups.” Before the sale, Dubchak hadn’t been involved in raising funds for new ventures or putting together bank syndicates for a corporate revolver. His responsibilities increased exponentially.

“In the first year or so, everything was being drafted and completed for the very first time, so there was a focus on ensuring that we didn’t stumble out of the gate.”

Dubchak became the vice president, general counsel, and corporate secretary of Niska Gas. He and the rest of the executive team took on the challenge of taking the company public, and Dubchak was involved in nearly every aspect of the process.

From the minute he took on the role in 2007 to when he rang the bell on the floor of the New York Stock Exchange in 2010, Dubchak was focused on taking the company public while implementing new legal functions. The company and Dubchak’s legal and regulatory group were also chasing acquisitions and managing regulatory issues incumbent on becoming a publicly traded company. “These were all issues the legal and regulatory group had to take on, but accountability for delivery of solutions and compliance started and stopped with the general counsel,” says Dubchak.

In addition, reporting to a new nine-person public board and getting up to speed on the NYSE/SEC rules was challenging in the first few months of public company operation. “In the first year or so, everything was being drafted and completed for the very first time, so there was a focus on ensuring that we didn’t stumble out of the gate,” Dubchak says.

In 2015, Dubchak was part of another change when Riverstone Holdings, which managed the private equity energy fund that purchased Niska, decided to divest Niska to Brookfield Infrastructure.

Again, coordinating all legal and regulatory aspects of the transaction was on Dubchak’s shoulders. He is involved in nearly all aspects of the transaction that will ultimately make Niska Gas Storage Partners a private entity.

“We’re more prepared for it than we were in 2006,” says Dubchak. “Back then, we were a business unit without all the pieces for a stand-alone company. Since those early days, Niska has evolved into a well-run company with significant organizational capabilities.”

Going private means Dubchak can put aside some of his group’s legal and regulatory responsibilities. Niska will no longer have to manage public unit-holder and board-related activities, nor will it need to interact with the SEC and NYSE regulators.

This also means that the business can be more nimble to react to new opportunities. “When you’re dealing with a public board and public company regulators, you often are challenged to make quick opportunistic decisions to pursue an acquisition or add a new line of business,” says Dubchak.

With the switch from public to private, there are fewer internal and external hurdles, so decisions are more efficient and easier to execute.

Brookfield will inherit a highly functioning governance structure supporting a platform that is ready for growth. For Dubchak, that means shifting some aspects of his role from disclosure and public governance to a more corporate and commercial role.

Since Dubchak started, he’s seen the company change from Alberta Energy to EnCana, to a privately held Niska owned by Riverstone, to Niska being owned by Riverstone and the public, to its fifth owner within fifteen years. He’s now reported to six different CEOs and adapted to their different management styles.

He sees the future of the company with Brookfield as a positive. Brookfield is backing the company financially and looks to Niska as a platform to operate its existing storage facilities.

That equates to lower financing costs, more customers, growth for the company, and more challenging work for Dubchak and his team.

NISKA: BY THE NUMBERS

2006
year the business is acquired by Riverstone Holdings

225.5
billion cubic feet of natural gas storage space

2010
year the company launches its IPO

$156.51M
company’s market capital (as of May 2016)