- Unit-for-unit, credit neutral bolt-on acquisition
- Expected to be immediately accretive to DCF per unit upon
closing
- Extends Energy Transfer’s position in the value chain deeper
into the Williston and Delaware basins
- Provides entry into the Powder River basin
- Commercial synergy opportunities from the combination of
Crestwood’s Storage and Logistics business and Energy Transfer’s
NGL & Refined Products and Crude Oil assets
- Provides Crestwood unitholders with enhanced distribution and
significant long-term value appreciation opportunities
Energy Transfer LP (NYSE: ET) (“Energy Transfer”) and Crestwood
Equity Partners LP (NYSE: CEQP) (“Crestwood”) announced today that
the parties have entered into a definitive merger agreement
pursuant to which Energy Transfer will acquire Crestwood in an
all-equity transaction valued at approximately $7.1 billion,
including the assumption of $3.3 billion of debt, based on the
closing price on August 15, 2023.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20230816214795/en/
Under the terms of the agreement, Crestwood common unitholders
will receive 2.07 Energy Transfer common units for each Crestwood
common unit. The transaction is expected to close in the fourth
quarter of 2023, subject to the approval of Crestwood’s
unitholders, regulatory approvals, and other customary closing
conditions. Upon closing, Crestwood common unitholders are expected
to own approximately 6.5% of Energy Transfer’s outstanding common
units.
Complementary Assets
Crestwood’s system includes gathering and processing assets
located in the Williston, Delaware and Powder River basins,
including approximately 2.0 billion cubic feet per day of gas
gathering capacity, 1.4 billion cubic feet per day of gas
processing capacity and 340 thousand barrels per day of crude
gathering capacity. If consummated, this transaction would extend
Energy Transfer’s position in the value chain deeper into the
Williston and Delaware basins while also providing entry into the
Powder River basin. These assets are expected to complement Energy
Transfer’s downstream fractionation capacity at Mont Belvieu, as
well as its hydrocarbon export capabilities from both its Nederland
Terminal in Texas and the Marcus Hook Terminal in Philadelphia,
Pennsylvania.
This transaction is also expected to provide benefits to Energy
Transfer’s NGL & Refined Products and Crude Oil businesses with
the addition of strategically located storage and terminal assets,
including approximately 10 million barrels of storage capacity, as
well as trucking and rail terminals. These systems are anchored by
predominantly investment-grade producer customers with firm,
long-term contracts, and significant acreage dedications.
Positive Financial Impact
The transaction is expected to be immediately accretive to
distributable cash flow per unit as well as neutral to Energy
Transfer’s leverage metrics upon closing. Similar to Energy
Transfer, Crestwood’s cash flows are supported by primarily
fee-based revenues from long-term contracts with investment-grade
counterparties. In addition, with the increased scale and
strengthened balance sheet, Energy Transfer expects to be able to
improve on the current cost of financing for the acquired debt
securities. Structured as a 100% unit-for-unit exchange, the
transaction is tax-efficient to Crestwood unitholders and is
anticipated to position both partnerships for long-term value
upside through the combination.
Energy Transfer also expects to achieve at least $40 million of
annual run-rate cost synergies before additional benefits of
financial and commercial opportunities.
Compelling Value Creation for Crestwood Unitholders
Energy Transfer’s premier business model, strong balance sheet
and backlog of growth opportunities supports the potential for
significant additional value creation over time. The tax-efficient
transaction is expected to provide Crestwood unitholders a benefit
to distributions per unit and an opportunity to participate in
Energy Transfer’s targeted annual distribution per unit growth rate
of 3-5%.
Advisors
BofA Securities acted as sole financial advisor to Energy
Transfer and Kirkland & Ellis LLP acted as legal counsel.
Intrepid Partners, LLC and Evercore acted as financial advisors to
Crestwood and Vinson & Elkins LLP acted as legal counsel.
Crestwood Investor Call
Crestwood management will host a conference call for investors
and analysts of Crestwood today at 9:00 a.m. Eastern Time (8:00
a.m. Central Time), which will be broadcast live over the Internet.
Investors will be able to access the webcast via the “Investors”
page of Crestwood’s website at www.crestwoodlp.com. Please log in
at least ten minutes in advance to register and download any
necessary software. A replay will be available shortly after the
call for 90 days.
Additional Information
Slide presentations with additional information are accessible
via the Energy Transfer and Crestwood websites at
www.energytransfer.com and www.crestwoodlp.com.
About Energy Transfer
Energy Transfer LP (NYSE: ET) owns and operates one of
the largest and most diversified portfolios of energy assets in the
United States, with nearly 125,000 miles of pipeline and associated
energy infrastructure. Energy Transfer’s strategic network spans 41
states with assets in all of the major U.S. production basins.
Energy Transfer is a publicly traded limited partnership with core
operations that include complementary natural gas midstream,
intrastate and interstate transportation and storage assets; crude
oil, natural gas liquids (“NGL”) and refined product transportation
and terminalling assets; and NGL fractionation. Energy Transfer
also owns Lake Charles LNG Company, as well as the general partner
interests, the incentive distribution rights and approximately 34%
of the outstanding common units of Sunoco LP (NYSE: SUN), and the
general partner interests and approximately 47% of the outstanding
common units of USA Compression Partners, LP (NYSE: USAC). For more
information, visit the Energy Transfer LP website at
www.energytransfer.com.
About Crestwood Equity Partners LP
Houston, Texas, based Crestwood Equity Partners LP (NYSE: CEQP)
is a master limited partnership that owns and operates midstream
businesses in multiple shale resource plays across the United
States. Crestwood is engaged in the gathering, processing,
treating, compression and transportation of natural gas; storage,
transportation, terminalling, and marketing of NGLs; gathering,
storage, terminalling and marketing of crude oil; and gathering and
disposal of produced water. For more information, visit Crestwood
Equity Partners LP at www.crestwoodlp.com; and to learn more about
Crestwood’s sustainability efforts, please visit
https://esg.crestwoodlp.com.
Important Information about the Transaction and Where to Find
It
In connection with the proposed transaction between Energy
Transfer and Crestwood, Energy Transfer and Crestwood will file
relevant materials with the Securities and Exchange Commission (the
“SEC”), including a registration statement on Form S-4 filed by
Energy Transfer that will include a proxy statement of Crestwood
that also constitutes a prospectus of Energy Transfer. A definitive
proxy statement/prospectus will be mailed to unitholders of
Crestwood. This communication is not a substitute for the
registration statement, proxy statement or prospectus or any other
document that Energy Transfer or Crestwood (as applicable) may file
with the SEC in connection with the proposed transaction. BEFORE
MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY
HOLDERS OF Energy Transfer AND CRESTWOOD ARE URGED TO READ THE
REGISTRATION STATEMENT, THE PROXY STATEMENT/PROSPECTUS AND ANY
OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE
SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS,
CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE
THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security
holders may obtain free copies of the registration statement and
the proxy statement/prospectus (when they become available), as
well as other filings containing important information about Energy
Transfer or Crestwood, without charge at the SEC’s website, at
http://www.sec.gov. Copies of the documents filed with the SEC by
Energy Transfer will be available free of charge on Energy
Transfer’s website at www.energytransfer.com under the tab
“Investor Relations” and then under the tab “SEC Filings” or by
directing a request to Investor Relations, Energy Transfer LP, 8111
Westchester Drive, Suite 600, Dallas, TX 75225, Tel. No. (214)
981-0795 or to investorrelations@energytransfer.com. Copies of the
documents filed with the SEC by Crestwood will be available free of
charge on Crestwood’s website at www.crestwoodlp.com under the tab
“Investors” and then under the tab “SEC Filings” or by directing a
request to Investor Relations, Crestwood Equity Partners LP, 811
Main Street, Suite 3400, Houston, TX 77002, Tel. No. (832) 519-2200
or to investorrelations@crestwoodlp.com. The information included
on, or accessible through, Energy Transfer’s or Crestwood’s website
is not incorporated by reference into this communication.
Participants in the Solicitation
Energy Transfer, Crestwood and the directors and certain
executive officers of their respective general partners may be
deemed to be participants in the solicitation of proxies in respect
of the proposed transaction. Information about the directors and
executive officers of Crestwood’s general partner is set forth in
its proxy statement for its 2023 annual meeting of unitholders,
which was filed with the SEC on March 31, 2023, and in its Annual
Report on Form 10-K for the year ended December 31, 2022, which was
filed with the SEC on February 27, 2023. Information about the
directors and executive officers of Energy Transfer’s general
partner is set forth in its Annual Report on Form 10-K for the year
ended December 31, 2022, which was filed with the SEC on February
17, 2023. Additional information regarding the participants in the
proxy solicitation and a description of their direct or indirect
interests, by security holdings or otherwise, will be contained in
the proxy statement/prospectus and other relevant materials filed
with the SEC when they become available.
No Offer or Solicitation
This communication is for informational purposes only and is not
intended to, and shall not, constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any offer, issuance,
exchange, transfer, solicitation or sale of securities in any
jurisdiction in which such offer, issuance, exchange, transfer,
solicitation or sale would be in contravention of applicable law.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended (the “Securities Act”).
Forward-Looking Statements
This communication contains “forward-looking statements” within
the meaning of the federal securities laws, including Section 27A
of the Securities Act and Section 21E of the Securities Exchange
Act of 1934, as amended. In this context, forward-looking
statements often address future business and financial events,
conditions, expectations, plans or ambitions, and often include,
but are not limited to, words such as “believe,” “expect,” “may,”
“will,” “should,” “could,” “would,” “anticipate,” “estimate,”
“intend,” “plan,” “seek,” “see,” “target” or similar expressions,
or variations or negatives of these words, but not all
forward-looking statements include such words. Forward-looking
statements by their nature address matters that are, to different
degrees, uncertain, such as statements about the consummation of
the proposed transaction and the anticipated benefits thereof. All
such forward-looking statements are based upon current plans,
estimates, expectations and ambitions that are subject to risks,
uncertainties and assumptions, many of which are beyond the control
of Energy Transfer and Crestwood, that could cause actual results
to differ materially from those expressed in such forward-looking
statements. Important risk factors that may cause such a difference
include, but are not limited to: the completion of the proposed
transaction on anticipated terms and timing, or at all, including
obtaining regulatory approvals that may be required on anticipated
terms and Crestwood unitholder approval; anticipated tax treatment,
unforeseen liabilities, future capital expenditures, revenues,
expenses, earnings, synergies, economic performance, indebtedness,
financial condition, losses, future prospects, business and
management strategies for the management, expansion and growth of
the combined company’s operations and other conditions to the
completion of the merger, including the possibility that any of the
anticipated benefits of the proposed transaction will not be
realized or will not be realized within the expected time period;
the ability of Energy Transfer and Crestwood to integrate the
business successfully and to achieve anticipated synergies and
value creation; potential litigation relating to the proposed
transaction that could be instituted against Energy Transfer,
Crestwood or the directors of their respective general partners;
the risk that disruptions from the proposed transaction will harm
Energy Transfer’s or Crestwood’s business, including current plans
and operations and that management’s time and attention will be
diverted on transaction-related issues; potential adverse reactions
or changes to business relationships, including with employees
suppliers, customers, competitors or credit rating agencies,
resulting from the announcement or completion of the proposed
transaction; rating agency actions and Energy Transfer and
Crestwood’s ability to access short- and long-term debt markets on
a timely and affordable basis; legislative, regulatory and economic
developments, changes in local, national, or international laws,
regulations, and policies affecting Energy Transfer and Crestwood;
potential business uncertainty, including the outcome of commercial
negotiations and changes to existing business relationships during
the pendency of the proposed transaction that could affect Energy
Transfer’s and/or Crestwood’s financial performance and operating
results; certain restrictions during the pendency of the merger
that may impact Crestwood’s ability to pursue certain business
opportunities or strategic transactions or otherwise operate its
business; acts of terrorism or outbreak of war, hostilities, civil
unrest, attacks against Energy Transfer or Crestwood, and other
political or security disturbances; dilution caused by Energy
Transfer’s issuance of additional units representing limited
partner interests in connection with the proposed transaction; the
possibility that the transaction may be more expensive to complete
than anticipated, including as a result of unexpected factors or
events; the impacts of pandemics or other public health crises,
including the effects of government responses on people and
economies; changes in the supply, demand or price of oil, natural
gas, and natural gas liquids; those risks described in Item 1A of
Energy Transfer’s Annual Report on Form 10-K, filed with the SEC on
February 17, 2023, and its subsequent Quarterly Reports on Form
10‑Q and Current Reports on Form 8-K; those risks described in Item
1A of Crestwood’s Annual Report on Form 10-K, filed with the SEC on
February 27, 2023, and its subsequent Quarterly Reports on Form
10-Q and Current Reports on Form 8-K; and those risks that will be
more fully described in the registration statement on Form S-4 and
accompanying proxy statement/prospectus that will be filed with the
SEC in connection with the proposed transaction.
While the list of factors presented here is, and the list of
factors to be presented in the registration statement and the proxy
statement/prospectus will be, considered representative, no such
list should be considered to be a complete statement of all
potential risks and uncertainties. Unlisted factors may present
significant additional obstacles to the realization of
forward-looking statements. Energy Transfer and Crestwood caution
you not to place undue reliance on any of these forward-looking
statements as they are not guarantees of future performance or
outcomes and that actual performance and outcomes, including,
without limitation, our actual results of operations, financial
condition and liquidity, and the development of new markets or
market segments in which we operate, may differ materially from
those made in or suggested by the forward-looking statements
contained in this communication. Neither Energy Transfer nor
Crestwood assumes any obligation to publicly provide revisions or
updates to any forward-looking statements, whether as a result of
new information, future developments or otherwise, should
circumstances change, except as otherwise required by securities
and other applicable laws. Neither future distribution of this
communication nor the continued availability of this communication
in archive form on Energy Transfer’s or Crestwood’s website should
be deemed to constitute an update or re-affirmation of these
statements as of any future date.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230816214795/en/
Energy Transfer Investor Relations: Bill Baerg, Brent
Ratliff, Lyndsay Hannah, 214-981-0795 Media Relations:
Media@energytransfer.com 214-840-5820 Crestwood Equity Partners LP
Investor Contact Andrew Thorington, 713-380-3028
andrew.thorington@crestwoodlp.com Vice President, Finance and
Investor Relations Media Contact Joanne Howard, 832-519-2211
joanne.howard@crestwoodlp.com Senior Vice President, Sustainability
and Corporate Communications
Crestwood Equity Partners (NYSE:CEQP)
Historical Stock Chart
From Oct 2024 to Nov 2024
Crestwood Equity Partners (NYSE:CEQP)
Historical Stock Chart
From Nov 2023 to Nov 2024
