A consortium led by private equity firms Apollo Global Management (APO.N) and Riverstone Holdings struck a $7.15 billion deal for El Paso Corp’s (EP.N) oil and gas exploration and production business in the largest leveraged buyout deal of the year so far.

The Apollo and Riverstone group includes billionaire Len Blavatnik’s Access Industries and other parties, El Paso said in a statement.

Kinder Morgan Inc (KMI.N) is selling off the business, which it would have picked up as part of its $21 billion deal to buy rival El Paso late last year. Because Kinder Morgan was only interested in El Paso’s pipeline assets, it promptly put the E&P business on the block, hoping to use proceeds from the sale to reduce the cost of the original deal.

Private equity firms have flooded the U.S. oil and gas sector with billions of dollars in recent years, buying assets from energy firms thirsty for capital to help them drill in expensive and challenging areas.

Last year’s second-largest leveraged buyout came from the energy space, as a consortium lead by private equity firm KKR & Co LP (KKR.N) paid $7.2 billion for privately held oil and gas group Samson Investment Co.

The deal provides a jump start to what has been a slow year for leveraged buyouts. Private equity-backed mergers and acquitions totaled $15.9 billion worldwide year-to-date before the deal was announced, a 33 percent decline year-on-year, according to Thomson Reuters data.

The buyers have already arranged for $5.5 billion in financing for the El Paso assets, which includes a $3 billion bridge loan and a $2 billion revolving credit facility, according to a source familiar with the matter.

Citi and J.P. Morgan are the co-lead bankers on the bridge loan, while J.P. Morgan is the lead banker on the revolver, the source said.

Source: Reuters