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Item 1.01.
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Entry into a Material Definitive Agreement.
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The information set forth under “Item 2.01-Completion of Acquisition or Disposition of Assets” below is incorporated into this Item 1.01 by reference.
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Item 2.01.
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Completion of Acquisition or Disposition of Assets.
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On April 2, 2018, Energy Transfer Partners, L.P. (the “Partnership”) and certain of its affiliates completed their previously announced contribution to USA Compression Partners, LP (“USAC”) of all of the issued and outstanding membership interests of CDM Resource Management LLC (“CDM”) and CDM Environmental & Technical Services LLC (“CDM E&T” and, together with CDM, the “CDM Entities”), in exchange for aggregate consideration of approximately $1.7 billion (the “Consideration”), consisting of (i) 19,191,351 common units representing limited partner interests in USAC (“USAC Common Units”), (ii) 6,397,965 Class B units representing limited partner interests in USAC (“USAC Class B Units”) and (iii) $1.232 billion in cash (including customary closing adjustments) (collectively, the “Contribution”). The USAC Class B units issued to the Partnership will not pay quarterly cash distributions for the first four quarters following closing and will convert into USAC Common Units on a one-for-one basis after such time.
In connection with the closing of the Contribution, and as previously disclosed in the Partnership’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 15, 2018, the Partnership entered into (i) a registration rights agreement (the “Registration Rights Agreement”) with USAC, USA Compression Holdings, LLC (“USAC Holdings”) and Energy Transfer Equity, L.P. (“ETE”) and (ii) a transition services agreement (the “Transition Services Agreement”) with certain of its subsidiaries and USAC. Pursuant to the Registration Rights Agreement, the Partnership has certain rights to require USAC to file and maintain the effectiveness of a registration statement with respect to the re-sale of the USAC Common Units owned by the Partnership (including USAC Common Units issued upon the conversion of the USAC Class B Units), and under certain circumstances, to require USAC to initiate underwritten offerings for such USAC Common Units. In addition, subject to certain exceptions, the Partnership has agreed to certain transfer restrictions relating to the USAC Common Units. Pursuant to the Transition Services Agreement, the Partnership and its affiliates have agreed to provide certain transition services to USAC and its affiliates for a period of 90 days following the closing of the Contribution.
The foregoing description of the Registration Rights Agreement and the Transition Services Agreement does not purport to be complete and is qualified in its entirety by reference to the text of the Registration Rights Agreement and Transition Services Agreement, as applicable, copies of which are filed as Exhibit 10.1 and Exhibit 10.2 to this Current Report on Form 8-K, respectively, and are incorporated into this Item 2.01 by reference.
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Item 7.01.
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Regulation FD Disclosure.
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On April 2, 2018, the Partnership, ETE and USAC issued a joint press release announcing the closing of the Contribution. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated into this Item 7.01 by reference.
In accordance with General Instruction B.2 of Form 8-K, the information furnished pursuant to Item 7.01 and the press release attached hereto as Exhibit 99.1 relating to this Item 7.01 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.