- Sale provides significant capital to be
redeployed in core operating areas of the deep-water Gulf of
Mexico, Permian Basin and East Texas
- Transaction materially simplifies
American Midstream’s business profile
- Partnership expects to redeploy
substantially all proceeds in third quarter of 2017
- Announces acquisition of Viosca Knoll;
further integrating Gulf of Mexico system
- Maintains 2017 Adjusted EBITDA
guidance; expects material increase in 2018
American Midstream Partners, LP (NYSE:AMID) (“Partnership” or
“AMID”) announced it has entered into a definitive agreement for
the sale of the Partnership’s Propane Marketing and Services
(“Propane”) business to SHV Energy N.V. for $170 million in cash,
subject to working capital adjustments. The transaction is expected
to close in the third quarter of 2017.
Through the transaction, the Partnership will divest 100% of
Propane, including Pinnacle Propane’s 40 service locations;
Pinnacle Propane Express’ cylinder exchange business and related
logistic assets; and the Alliant Gas utility system.
For the past several quarters, the Partnership’s management has
reiterated its intention of growing distributable cash flow and
creating balance sheet flexibility to pursue its growth objectives.
In the second quarter of 2017, AMID began executing on a capital
optimization strategy to simplify its businesses and redeploy
capital from non-core assets toward complementary opportunities in
the Partnership’s Gulf of Mexico, Permian Basin and East Texas
assets.
Core Area Capital Redeployment
Through a series of executed and anticipated transactions, the
Partnership expects that substantially all proceeds from the
Propane sale will be reallocated within the third quarter of 2017,
further enhancing AMID’s cash flow profile.
This includes the Partnership’s June 2, 2017 acquisition of the
Viosca Knoll system (“Viosca Knoll”) from Genesis Energy, L.P. for
total consideration of approximately $32 million. Viosca Knoll
serves producing fields located in Main Pass, Mississippi Canyon
and Viosca Knoll areas in deep-water Gulf of Mexico that connect to
several major delivery pipelines, including AMID’s High Point and
Destin pipelines. The acquisition of Viosca Knoll continues the
Partnership’s development of a premier Gulf of Mexico system
offering strong interconnectivity across the Gulf Coast and
providing customers with more efficient delivery options. The
acquisition was initially funded with borrowings from the
Partnership’s senior secured credit facility and will be repaid
commensurate with closing of the Propane transaction.
“Over the past few months, AMID’s management team has
communicated its strategy to strengthen the Partnership’s
competitive position in our core areas, evaluate non-core asset
sales and reallocate capital to areas with the greatest long-term
value. The sale of the Propane business and acquisition of Viosca
Knoll are the first steps in implementing a strategy that achieves
these goals,” stated Lynn Bourdon, the Partnership’s Chief
Executive Officer. “Reallocating capital from non-core assets into
more strategic investments significantly repositions AMID’s ability
to compete and to generate significant unitholder value.”
The Partnership expects to announce further beneficial outcomes
of its capital optimization strategy over the coming months and is
maintaining its previously announced 2017 Adjusted EBITDA guidance
of $190 to 205 million. Based on anticipated outcomes of its growth
strategy and other opportunities the Partnership is pursuing,
American Midstream expects a material increase in 2018 Adjusted
EBITDA.
Closing of the sale of the Propane business is subject to
customary closing conditions, including clearance under the
Hart-Scott-Rodino Act.
Wells Fargo Securities, LLC acted as exclusive financial advisor
and Gibson, Dunn & Crutcher LLP served as legal counsel to
American Midstream for the Propane transaction.
About American Midstream Partners, LP
American Midstream Partners, LP is a growth-oriented limited
partnership formed to provide critical midstream infrastructure
that links producers of natural gas, crude oil, NGLs, condensate
and specialty chemicals to end-use markets. American Midstream’s
assets are strategically located in some of the most prolific
onshore and offshore basins in the Permian, Eagle Ford, East Texas,
Bakken and Gulf Coast. American Midstream owns or has an ownership
interest in approximately 4,000 miles of interstate and intrastate
pipelines, as well as ownership in gas processing plants,
fractionation facilities, an offshore semisubmersible floating
production system with nameplate processing capacity of 100 MBbl/d
of crude oil and 240 MMcf/d of natural gas; and terminal sites with
approximately 6.7 MMBbls of storage capacity.
For more information about American Midstream Partners, LP,
visit: www.americanmidstream.com.
About SHV Energy
SHV Energy is one of the world’s leading LPG distributors. In
addition, SHV Energy also provides small-scale LNG, biomass and
soon also bio-LPG to customers that do not have access to the
natural gas grid. SHV Energy enables its customers to switch from
heating oil and solid fuels to cleaner fuels such as LPG, LNG and
renewables, resulting in a lower carbon impact and improved air
quality. SHV Energy has 16,000 employees and operates in more than
20 countries under brands such as Primagaz, Calor Gas, Liquigas and
Ipragaz. Revenues in 2016 were USD 6.6 billion. As part of the 121
years old Dutch privately owned SHV Holdings, SHV Energy is
committed to working sustainably with communities, stakeholders and
policymakers.
For more information about SHV Energy, visit:
www.shvenergy.com.
Forward-Looking Statements
This press release may contain forward-looking statements. All
statements that are not statements of historical facts, including
statements regarding our future financial position, business
strategy, budgets, projected costs and plans and objectives of
management for future operations, are forward-looking statements.
We have used the words “anticipate,” “believe,” “could,”
“estimate,” “expect,” “intend,” “may,” “plan,” “predict,”
“project,” “should,” “will,” “potential,” “guidance,” and similar
terms and phrases to identify forward-looking statements in this
press release. Although we believe that the assumptions underlying
our forward-looking statements are reasonable, any of these
assumptions could be inaccurate, and, therefore, we cannot assure
you that the forward-looking statements included herein will prove
to be accurate. These forward-looking statements reflect our
intentions, plans, expectations, assumptions and beliefs about
future events and are subject to risks, uncertainties and other
factors, many of which are outside our control. Actual results and
trends in the future may differ materially from those suggested or
implied by the forward-looking statements depending on a variety of
factors which are described in greater detail in our filings with
the Securities and Exchange Commission (“SEC”). Please see our
“Risk Factors” and other disclosures included in our Annual Report
on Form 10-K for the year ended December 31, 2016, filed with the
SEC on March 28, 2017, Form 10-Q for the quarter ended March 31,
2017, filed with the SEC on May 15, 2017, and our other filings
with the SEC. All future written and oral forward-looking
statements attributable to us or persons acting on our behalf are
expressly qualified in their entirety by the previous statements.
The forward-looking statements herein speak as of the date of this
press release. We undertake no obligation to update any information
contained herein or to publicly release the results of any
revisions to any forward-looking statements that may be made to
reflect events or circumstances that occur, or that we become aware
of, after the date of this press release.
Non-GAAP Financial Measures
This press release includes supplemental non-GAAP financial
measure “Adjusted EBITDA.” You should not consider Adjusted EBITDA
in isolation or as a substitute for, or more meaningful than
analysis of, our results as reported under GAAP. Adjusted EBITDA
may be defined differently by other companies in our industry. Our
definitions of this non-GAAP financial measures may not be
comparable to similarly titled measures of other companies, thereby
diminishing its utility.
Adjusted EBITDA is a supplemental non-GAAP financial measure
used by our management and external users of our financial
statements, such as investors, commercial banks, research analysts
and others, to assess: the financial performance of our assets
without regard to financing methods, capital structure or
historical cost basis; the ability of our assets to generate cash
flow to make cash distributions to our unitholders and our General
Partner; our operating performance and return on capital as
compared to those of other companies in the midstream energy
sector, without regard to financing or capital structure; and the
attractiveness of capital projects and acquisitions and the overall
rates of return on alternative investment opportunities.
We define Adjusted EBITDA as net income (loss) attributable to
the Partnership, plus interest expense, income tax expense,
depreciation, amortization and accretion expense attributable to
the Partnership, debt issuance costs paid during the period,
distributions from investments in unconsolidated affiliates,
transaction expenses primarily associated with our JPE Merger,
Delta House acquisition, certain non-cash charges such as non-cash
equity compensation expense, unrealized (gains) losses on
derivatives and selected charges that are unusual, less
construction and operating management agreement income, other
post-employment benefits plan net periodic benefit, earnings in
unconsolidated affiliates, gains (losses) on the sale of assets,
net, and selected gains that are unusual. The GAAP measure most
directly comparable to our performance measure Adjusted EBITDA is
net income (loss) attributable to the Partnership.
In this release, we present projected Adjusted EBITDA guidance
for 2017. We are unable to project net income (loss) attributable
to the Partnership to provide the related reconciliations of
projected Adjusted EBITDA to the most comparable financial measure
calculated in accordance with GAAP, because the impact of changes
in distributions from unconsolidated affiliates, operating assets
and liabilities, the volume and timing of payments received and
utilized from our customers are out of our control and cannot be
reasonably predicted. We provide a range for the forecast of
Adjusted EBITDA to allow for the variability in gain (loss) on sale
of assets, timing of cash receipts and disbursements, customer
utilization of our assets, interest expense and the impact on the
related reconciling items, many of which interplay with each other.
Therefore, the reconciliation of Adjusted EBITDA to projected net
income (loss) attributable to the Partnership is not available
without unreasonable effort.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170724005345/en/
Investor ContactMark Buscovich, 346-241-3467Manager of
Financembuscovich@americanmidstream.com
American Midstream Partn... (NYSE:AMID)
Historical Stock Chart
From Mar 2024 to Apr 2024
American Midstream Partn... (NYSE:AMID)
Historical Stock Chart
From Apr 2023 to Apr 2024
