Inergy Midstream, L.P. Acquires US Salt from Inergy, L.P.
May 14 2012 - 7:45AM
Business Wire
Inergy Midstream, L.P. (NYSE:NRGM) (NRGM) announced today that
it has acquired 100% of the membership interests in US Salt, LLC
(US Salt) from Inergy, L.P. (NYSE:NRGY) (NRGY) for total
consideration of $192.5 million. The transaction is expected to be
immediately accretive to NRGM unitholders on a distributable cash
flow per unit basis.
“The acquisition of US Salt represents the first drop down
transaction for NRGM and complements our existing natural gas and
NGL storage and transportation platform nicely. This transaction
demonstrates our commitment to growing NRGM’s distributable cash
flow and delivering on the growth expectations for the company,”
said John Sherman, President and CEO of NRGM.
US Salt, located on the shores of Seneca Lake outside of Watkins
Glen, New York, is one of five major solution mined salt
manufacturers in the United States, producing evaporated salt
products for food, industrial, pharmaceutical, and water
conditioning uses. The US Salt operations are complementary to
NRGM’s existing midstream energy storage platform. The solution
mining process used by US Salt creates salt caverns that can be
developed into usable natural gas and natural gas liquids (NGL)
storage capacity. US Salt has approximately 10 bcf of available
cavern space that can potentially be developed into additional
natural gas storage capacity.
Bill Moler, Senior Vice President and COO of NRGM, added, “US
Salt is characterized by very stable cash flows and adds
substantial growth opportunities to our gas and NGL storage
business at NRGM.”
The consideration of $192.5 million consists of $182.5 million
of cash, which will be drawn on NRGM’s revolving credit facility,
and $10 million of NRGM common units issued directly to NRGY. On
April 16, 2012, NRGM exercised a $100 million accordion expansion
of its revolving credit facility, increasing the total borrowing
capacity to $600 million.
Terms of the transaction were unanimously approved by the Board
of Directors of NRGM’s general partner based upon the
recommendation of its Conflicts Committee.
About Inergy Midstream, L.P.
Inergy Midstream, L.P., headquartered in Kansas City, Missouri,
is a master limited partnership engaged in the development and
operation of natural gas and NGL storage and transportation assets.
Inergy Midstream owns and operates natural gas storage facilities
with aggregate working gas capacity of 41 bcf, natural gas liquids
storage facilities with capacity of 1.5 million barrels, and
natural gas pipelines with 355 MMcf/d of transportation capacity in
New York and Pennsylvania. Inergy Midstream, L.P. is a subsidiary
of Inergy, L.P.
About Inergy, L.P.
Inergy, L.P., also headquartered in Kansas City, Missouri, is a
publicly traded master limited partnership. Inergy’s operations
include the retail marketing, sale, and distribution of propane to
residential, commercial, industrial, and agricultural customers
from customer service centers throughout the United States. The
company also operates a natural gas storage business in Texas and
an NGL supply logistics, transportation, and wholesale marketing
business that serves customers in the United States and Canada.
Through its general partner interest and majority equity ownership
interest in Inergy Midstream, L.P. (NYSE:NRGM), Inergy is also
engaged in the development and operation of natural gas and NGL
storage and transportation business in the Northeast region of the
United States.
Cautionary Statement Regarding Forward-Looking
Statements
This news release contains forward-looking statements, which are
statements that are not historical in nature such as the
expectation that the transaction is immediately accretive to
distributable cash flow per unit and the available 10 bcf of cavern
space can potentially be developed into additional natural gas
storage capacity. Forward-looking statements are subject to certain
risks, uncertainties, and assumptions. Should one or more of these
risks or uncertainties materialize or any underlying assumption
proves incorrect, actual results may vary materially from those
anticipated, estimated, or projected. Among the key factors that
could cause actual results to differ materially from those referred
to in the forward-looking statements are: weather conditions that
vary significantly from historically normal conditions; the demand
for high deliverability natural gas storage capacity in the
Northeast; the general level of petroleum product demand and the
availability of natural gas and the price of natural gas to the
consumer compared to the price of alternative and competing fuels;
our ability to successfully implement our business plan with
respect to our continued expansion of our midstream operations; our
ability to generate available cash for distribution to unitholders;
the outcome of rate decisions levied by the Federal Energy
Regulatory Commission; and the costs and effects of legal,
regulatory, and administrative proceedings against us or which may
be brought against us. These and other risks and assumptions are
described in Inergy’s annual report on Form 10-K and other reports
that are available from the United States Securities and Exchange
Commission.
Corporate news, unit prices, and additional
information about Inergy Midstream, including reports from the
United States Securities and Exchange Commission, are available on
the company’s website, www.Inergylp.com. For more information,
contact Mike Campbell in Inergy Midstream’s Investor Relations
Department at 816-842-8181 or via e-mail at
investorrelations@inergyservices.com.
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