American Midstream Partners, LP (NYSE: AMID) (“AMID” or
“Partnership”) announced today the acquisition and closing of 100%
of the equity interests in Trans-Union Interstate Pipeline, L.P.
(“Trans-Union”) from affiliates of ArcLight Capital Partners, LLC
(“ArcLight”), which controls the general partner of the
Partnership, for a total consideration of approximately $48
million. The consideration consisted of approximately $15.5 million
cash funded from borrowings under the Partnership’s revolving
credit facility and the assumption of $32.5 million of non-recourse
debt.
Trans-Union owns a 42-mile, 30-inch diameter high-pressure
FERC-regulated natural gas interstate pipeline with 546,000
MMbtu/day of maximum capacity. Trans-Union delivers natural gas
transmission from Sharon, Louisiana to customers in El Dorado,
Arkansas and is anchored by 15-year take-or-pay agreements with
approximately 91% of FERC regulated capacity with investment grade
utilities. Trans-Union primarily delivers natural gas to the Union
Power Station, owned by Entergy Arkansas, Inc., Entergy Louisiana,
LLC, and Entergy New Orleans, Inc., as well as to a recently
expanded fertilizer plant owned by El Dorado Chemical Company, a
subsidiary of LSB Industries.
The purchase of Trans-Union is immediately accretive to Adjusted
EBITDA and distributable cash flow and is complementary to AMID’s
existing natural gas transmission assets within the Southeastern
U.S. with proximity to AMID’s Midla system. The transaction offers
additional acquisition opportunities to continue building its
natural gas infrastructure assets to satisfy fast growing
Southeastern U.S. demand. This transaction is part of the
Partnership’s strategic capital reallocation strategy that is
refocusing capital to core assets at accretive multiples.
A conflicts committee of the board of directors of the general
partner of the Partnership composed of independent directors, as
well as the full board of directors of the general partner,
unanimously approved the transaction. This committee was advised by
Thompson & Knight LLP as to legal matters.
Southern Natural Gas Interconnect
Additionally, the Partnership announced the completion of a new
pipeline connection and commencement of deliveries into its AlaTenn
pipeline system with Southern Natural Gas (“SNG”) in Alabama. The
new SNG interconnect allows AlaTenn to participate in movement of
Northeast Marcellus natural gas supply into Southeast U.S. demand
markets. The interconnect materially increases AlaTenn’s
utilization via a 30% increase on AlaTenn’s contracted
capacity.
“We are pleased with AMID’s ongoing growth and participation in
natural gas infrastructure in the Southeast U.S. market,” stated
Lynn Bourdon III, President and Chief Executive Officer of the
Partnership. “The Trans-Union drop down further demonstrates AMID’s
beneficial relationship with ArcLight and increases our ability to
expand natural gas infrastructure density. Further, the SNG
interconnect expands AlaTenn’s market connectivity and increases
pipeline utilization with FERC regulated volumes. Combined, these
transactions anchor the Partnership as a leading provider in the
rapidly growing Southeastern U.S. natural gas transmission
market.”
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 100,000
Bbl/d of crude oil and 240 MMcf/d of natural gas; and terminal
sites with approximately 6.7 million Bbls of storage capacity. For
more information about American Midstream Partners, LP, visit
www.americanmidstream.com.
About ArcLight Capital Partners, LLC
ArcLight is one of the leading private equity firms focused on
energy infrastructure investments. Founded in 2001, the firm helped
pioneer an asset-based private equity approach to investing in the
dynamic energy sector. ArcLight has invested approximately $19
billion in over 100 transactions since inception. Based in Boston,
the firm’s investment team employs a hands-on value creation
strategy that utilizes its in-house technical, operational, and
commercial specialists as well as the firm’s 850-person asset
management affiliate. More information about ArcLight, and a
complete list of ArcLight's portfolio companies, can be found at
www.arclightcapital.com.
Non-GAAP Financial Measures
This press release includes financial measures in accordance
with U.S. generally accepted accounting principles, or GAAP, as
well as non-GAAP financial measures, including “Adjusted
EBITDA.”
We define distributable cash flow as Adjusted EBITDA, less cash
paid for interest expense, normalized maintenance capital
expenditures, and distributions related to the Series A, Series C
and Series D convertible preferred units. The GAAP financial
measure most comparable to distributable cash flow is Net income
(loss) attributable to the Partnership.
Forward Looking Statements
This press release includes forward-looking statements. These
statements relate to, among other things, projections of 2017
financial performance, operational volumetrics and improvements,
growth projects, cash flows and capital expenditures. We have used
the words "anticipate," "believe," "could," "estimate," "expect,"
"intend," "may," "plan," "predict," "project," "should," "will,"
"potential," "line-of-sight," and similar terms and phrases to
identify forward-looking statements in this press release. Although
we believe the assumptions upon which these forward-looking
statements are based are reasonable, any of these assumptions could
prove to be inaccurate and the forward-looking statements based on
these assumptions could be incorrect. Our operations and future
growth involve risks and uncertainties, many of which are outside
our control, and any one of which, or a combination of which, could
materially affect our results of operations and whether the
forward-looking statements ultimately prove to be correct. 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 SEC. Construction of growth projects is subject to
risks beyond our control including cost overruns and delays
resulting from numerous factors. In addition, we face risks
associated with the integration of acquired businesses, decreased
liquidity, increased interest and other expenses, assumption of
potential liabilities, diversion of management’s attention, and
other risks associated with growth and acquisitions, if
consummated. Please see our Risk Factor 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, and Form 10-Q for the quarter
ended June 30, 2017, filed with the SEC on August 10, 2017. 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.
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version on businesswire.com: http://www.businesswire.com/news/home/20171106005449/en/
American Midstream Partners, LPMark Buscovich,
713-815-3967mbuscovich@americanmidstream.comManager of Finance
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