Item 2.01
Completion of Acquisition or Disposition of Assets.
On April 26, 2018, Archrock Partners, L.P., a Delaware limited partnership (the Partnership), completed its merger with Amethyst Merger Sub LLC, a Delaware limited liability company (Merger Sub) and an indirect wholly owned subsidiary of Archrock, Inc., a Delaware corporation (Archrock), with the Partnership surviving the merger (the Merger) pursuant to that certain Agreement and Plan of Merger, dated as of January 1, 2018, as amended by Amendment No. 1 thereto, dated as of January 11, 2018 (as amended, the Merger Agreement), by and among the Partnership, Archrock, Merger Sub, Archrock General Partner, L.P., a Delaware limited partnership and the general partner of the Partnership (the General Partner), and Archrock GP LLC, a Delaware limited liability company and the general partner of the General Partner (the Managing GP). Upon consummation of the Merger, Archrock acquired all of the outstanding common units representing limited partner interests in the Partnership (Common Units) that Archrock and its subsidiaries did not already own.
Pursuant to the Merger Agreement, at the effective time of the Merger (the Effective Time), each outstanding Common Unit was converted into the right to receive 1.40 shares of common stock of Archrock, par value $0.01 per share (Archrock Common Stock and such amount, the Merger Consideration), other than Common Units that were owned immediately prior to the Effective Time of the Merger by Archrock or its subsidiaries, which remain outstanding, unaffected by the Merger. No fractional shares of Archrock Common Stock will be issued in the Merger; instead, all fractions of Archrock Common Stock to which a holder of Common Units otherwise would have been entitled will be aggregated and the resulting fraction will be rounded up to the nearest whole share of Archrock Common Stock. In connection with the Merger, all of the Partnerships incentive distribution rights, which were owned indirectly by Archrock, were canceled and cease to exist.
At the Effective Time, each award of phantom units of the Partnership (Partnership Phantom Units) (whether vested or unvested) that was outstanding as of immediately prior to the Effective Time was assumed by Archrock and converted into an award of restricted stock units of Archrock (Archrock RSUs) granted under Archrocks 2013 Stock Incentive Plan representing a number of shares of Archrock Common Stock equal to (i) the number of Partnership Phantom Units subject to such award as of immediately prior to the Effective Time, multiplied by (ii) 1.40, rounded down to the nearest whole Archrock RSU. Each such award of Archrock RSUs shall be subject to the same vesting, forfeiture and other terms and conditions (including form(s) of payment and distribution equivalent rights, if any) applicable to the converted award of Partnership Phantom Units as of immediately prior to the Effective Time.
Pursuant to the Merger Agreement, Archrock issued approximately 57.8 million shares of Archrock Common Stock to the holders of Common Units (other than Archrock and its subsidiaries) as the Merger Consideration as described above.
Pursuant to Amendment No. 1 to Credit Agreement, dated as of February 23, 2018 (Amendment No. 1 to Credit Agreement), which amends that certain Credit Agreement, dated as of March 30, 2017, by and among the Partnership, Archrock Partners Finance Corp., a wholly owned subsidiary of the Partnership, and Archrock Partners Leasing LLC, an indirect wholly owned subsidiary of the Partnership, as guarantors, Archrock Partners Operating LLC, a wholly owned subsidiary of the Partnership, as the borrower, JPMorgan Chase Bank, N.A., as administrative agent for the lenders thereunder, and the lenders party thereto, at the Effective Time, the Additional Amendments Effective Date (as defined in Amendment No. 1 to Credit Agreement) occurred. A summary of certain of the effects of Amendment No. 1 to the Credit Agreement upon the Additional Amendments Effective Date can be found in the Current Report on Form 8-K filed by the Partnership on February 28, 2018 (the Prior 8-K). A copy of Amendment No. 1 to Credit Agreement is attached as Exhibit 10.1 to the Prior 8-K, which is incorporated herein by reference.
The summary of the Merger Agreement in this Current Report on Form 8-K does not purport to be complete and is qualified by reference to the full text of the Merger Agreement, which is filed as Exhibit 2.1 to Archrocks Current Report on Form 8-K filed the Securities and Exchange Commission (the SEC) on January 2, 2018, and Amendment No. 1 thereto, a copy of which is attached as Exhibit 2.2 to the Partnerships Current Report on Form 8-K filed on January 16, 2018, each of which is incorporated herein by reference.
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