HOUSTON and KANSAS CITY, Mo., Oct.
7, 2013 /PRNewswire/ -- Crestwood Midstream Partners LP
(NYSE: CMLP) ("Crestwood Midstream") and Crestwood Holdings LLC
("Crestwood Holdings" and, together with Crestwood Midstream,
"Crestwood") and Inergy, L.P.
(NYSE: NRGY) ("Inergy L.P.") and Inergy Midstream, L.P. (NYSE:
NRGM) ("Inergy Midstream" and, together with Inergy L.P., "Inergy")
today announced that the merger of Crestwood and Inergy has been completed. The
combination is a fully integrated midstream partnership platform
with a total enterprise value of approximately $8 billion.
The merger of Crestwood Midstream with a subsidiary of Inergy
Midstream closed today, completing the final step in the
combination of Inergy and Crestwood. The newly combined entity has been
named Crestwood Midstream Partners LP and will trade under the
ticker symbol CMLP on the New York Stock Exchange beginning on
October 8, 2013. Additionally, Inergy
L.P. has been renamed Crestwood Equity Partners LP ("Crestwood
Equity") (collectively with the new Crestwood Midstream,
"Crestwood" or the "Partnership")
and will trade on the New York Stock Exchange under the ticker
symbol CEQP beginning on October 8,
2013.
The new Crestwood provides
broad-ranging midstream infrastructure solutions across the value
chain through assets in every premier shale play in North America. These diverse operations
include well located asset positions in the Marcellus, Utica, Bakken, Eagle Ford, Permian Basin,
Powder River Basin Niobrara, Barnett, Fayetteville, Granite Wash, Haynesville and
Monterey shale plays. Crestwood's strategy is to focus on
high-growth, liquids-rich and crude oil basins where there is the
greatest opportunity to "cross-sell" Crestwood's full suite of midstream services
from gathering and processing to storage and transportation via
trucks, rail and pipelines. This strategy will drive growth
through the timely execution of customer supported infrastructure
projects and delivery of services which will optimize and expand
the existing asset base. With a significant backlog of identified
organic growth opportunities around the existing asset footprint,
Crestwood is well-positioned to
achieve its growth objectives.
"Today begins an exciting chapter in the history of the
businesses that comprise the new Crestwood," said Robert G. Phillips, Chairman, President and
Chief Executive Officer. "We are thrilled to close this
transaction, completing the transformation into a fully integrated,
midstream MLP linking new shale-based energy supplies with the
growing energy demand across the midstream value chain. The
new Crestwood is uniquely
positioned with the diversified North American asset base of a
large cap midstream MLP while offering the visibility to growth and
commitment to customer services of a small cap MLP. We look
forward to completing our integration and working together as one
company to leverage the benefits of our enhanced size and scale as
the new Crestwood. We believe this combination will drive
significant benefits for all of our stakeholders and generate
enhanced value for our unitholders."
Going forward, Crestwood's core
operations will be organized into two primary business units: the
Natural Gas Unit, which will include all gathering and processing
and natural gas storage and transportation assets and operations,
and the Crude Oil and Liquids Unit, which will include all crude
oil rail terminals, trucking and storage, as well as all NGL
storage, trucking, logistics and marketing assets and
operations. These business units are working together to
leverage Crestwood's suite of
services to maximize fee opportunities and overall investment
returns. Additionally, Crestwood has implemented an Operations
Services business unit focused on standardizing best practices
company-wide to better service our customers and build economies of
scale to drive down costs. With the focus on "cross-selling"
the full suite of services and on delivering cost savings through
the Operations Services function, Crestwood estimates $15
to $20 million of annual run-rate cost synergies are
achievable by the first half of 2014.
As outlined in prior announcements, Robert G. Phillips has been named Chairman,
President and Chief Executive Officer of Crestwood Midstream and
Crestwood Equity. In addition, the following executive
appointments have been made for the merged organization:
- Heath Deneke, President,
Natural Gas Business Unit
- Bill Gautreaux,
President, Liquids & Crude Business Unit
- Mike Campbell, Senior
Vice President & Chief Financial Officer
- Steven Dougherty, Senior
Vice President & Chief Accounting Officer
- Joel Lambert, Senior Vice
President, General Counsel and Corporate Secretary
- Will Moore, Senior Vice
President, Strategy & Corporate Development
- Joel Moxley, Senior Vice
President, Operations Services
Mr. Phillips continued, "This is a first-class executive team
with extremely complementary skill sets and areas of expertise.
The integration process has allowed our executives to work
collaboratively across the entire organization to combine our
strengths, establish our forward strategy, and build the foundation
for future growth as Crestwood
achieves leadership across the midstream value chain. I look
forward to working alongside these talented individuals to build
the industry's next great midstream partnership. Additionally, the
combined work force of talented Crestwood and Inergy employees have shown,
during the integration process, that they are motivated to create
an industry leading operating platform in every facet of the
midstream value chain. With a focus on safety as our top priority,
leading environmental and regulatory compliance practices, and the
continued tradition of community involvement, the new Crestwood organization will be a key element
to our success."
Transaction Details
As previously announced, the
combination of Inergy and Crestwood was effected through a series of
transactions. In the first transaction, which closed on
June 19, 2013, Crestwood Holdings
acquired the general partner of Inergy L.P. for $80 million in cash. Prior to the closing
of this transaction, Inergy L.P. distributed to its unitholders all
of the approximately 56.4 million common units that it owned in
Inergy Midstream. Upon closing of this transaction, Crestwood
Holdings owned the general partner, and thus control, of Inergy
L.P.
In a second transaction, which also closed on June 19, 2013, Crestwood Gas Services Holdings
LLC, a wholly owned subsidiary of Crestwood Holdings, contributed
to Inergy L.P. 100% of its interest in Crestwood Gas Services GP
LLC, the general partner of Crestwood Midstream that also owns 100%
of the incentive distribution rights of Crestwood Midstream, in
exchange for approximately 35.1 million common units and
approximately 4.4 million subordinated units of Inergy L.P.
Crestwood Holdings also has the option to contribute to Inergy L.P.
approximately 7.1 million of the Inergy Midstream common units it
receives in the merger described below in exchange for
approximately 14.3 million common units of Inergy L.P., and has
elected to exercise this option, which results in it owning
approximately 29% of the total common units of Inergy, L.P.
outstanding.
In the final transaction, which closed today, Crestwood
Midstream merged with a subsidiary of Inergy Midstream. In
the merger, Crestwood Midstream unitholders received 1.070 common
units of Inergy Midstream for each unit of Crestwood Midstream they
own. Additionally, all Crestwood Midstream public unitholders
other than Crestwood Holdings received a one-time cash payment at
closing of $1.03 per common unit. On
October 4, 2013, the merger was
approved by the majority of the unitholders of Crestwood
Midstream.
About Crestwood Midstream Partners LP
Houston, Texas, based Crestwood Midstream
(NYSE: CMLP) is a master limited partnership that owns and operates
midstream businesses in multiple unconventional shale resource
plays across the United States. Crestwood Midstream is
engaged in the gathering, processing, treating and compression of
natural gas; transportation and storage of natural gas;
transportation, fractionation, storage, and terminalling of NGLs;
and storage and terminalling of crude oil. For more information
about Crestwood, visit
www.crestwoodlp.com.
About Crestwood Equity Partners LP
Houston, Texas, based Crestwood Equity (NYSE:
CEQP) is a master limited partnership that owns the general partner
interest (including the incentive distribution rights) and an
approximate 4% limited partner interest of Crestwood
Midstream. In addition, Crestwood Equity's operations include
a natural gas storage business in Texas and an NGL and crude oil supply and
logistics business that serves customers in the United States and Canada.
Forward Looking Statements
The statements in this
communication regarding future events, occurrences, circumstances,
activities, performance, outcomes and results are forward-looking
statements. Although these statements reflect the current views,
assumptions and expectations of Crestwood Midstream and Crestwood
Equity management, the matters addressed herein are subject to
numerous risks and uncertainties which could cause actual
activities, performance, outcomes and results to differ materially
from those indicated. Such forward-looking statements include, but
are not limited to, statements about the future financial and
operating results, objectives, expectations and intentions and
other statements that are not historical facts. Factors that could
result in such differences or otherwise materially affect Crestwood
Midstream's or Crestwood Equity's financial condition, results of
operations and cash flows include, without limitation, the risks
that the Crestwood Midstream and Crestwood Equity businesses will
not be integrated successfully or may take longer than anticipated;
the possibility that expected synergies will not be realized, or
will not be realized within the expected timeframe; fluctuations in
oil, natural gas and NGL prices; the extent and success of drilling
efforts, as well as the extent and quality of natural gas volumes
produced within proximity of Crestwood Midstream or Crestwood
Equity assets; failure or delays by customers in achieving expected
production in their natural gas projects; competitive conditions in
the industry and their impact on the ability of Crestwood Midstream
or Crestwood Equity to connect natural gas supplies to Crestwood
Midstream or Crestwood Equity gathering and processing assets or
systems; actions or inactions taken or non-performance by third
parties, including suppliers, contractors, operators, processors,
transporters and customers; the ability of Crestwood Midstream or
Crestwood Equity to consummate acquisitions, successfully integrate
the acquired businesses, realize any cost savings and other
synergies from any acquisition; changes in the availability and
cost of capital; operating hazards, natural disasters,
weather-related delays, casualty losses and other matters beyond
Crestwood Midstream or Crestwood Equity's control; timely receipt
of necessary government approvals and permits, the ability of
Crestwood Midstream or Crestwood Equity to control the costs of
construction, including costs of materials, labor and right-of-way
and other factors that may impact either company's ability to
complete projects within budget and on schedule; the effects of
existing and future laws and governmental regulations, including
environmental and climate change requirements; the effects of
existing and future litigation; and risks related to the
substantial indebtedness of either company, as well as other
factors disclosed in Crestwood Midstream and Crestwood Equity's
filings with the U.S. Securities and Exchange Commission. You
should read filings made by Crestwood Midstream and Crestwood
Equity with the U.S. Securities and Exchange Commission, including
Annual Reports on Form 10-K for the year ended December 31, 2012 and September 30, 2012, respectively, and the most
recent Quarterly Reports and Current Reports, for a more extensive
list of factors that could affect results. Crestwood Midstream and
Crestwood Equity do not assume any obligation to update these
forward-looking statements.
CONTACTS
Mark Stockard
832-519-2207
mstockard@crestwoodlp.com
or
Joele Frank, Wilkinson Brimmer
Katcher
Andy Brimmer / Michael Freitag / Jed
Repko
212-355-4449
SOURCE Crestwood Midstream Partners LP