Crestwood Midstream
Partners LP CMLP ("Crestwood Midstream") and Crestwood Holdings LLC
("Crestwood Holdings") (collectively, "Crestwood") and Inergy, L.P.
NRGY ("Inergy L.P.") and Inergy Midstream, L.P. NRGM ("Inergy
Midstream") (collectively, "Inergy") today announced the signing of definitive
agreements to create a fully integrated midstream partnership with a total
enterprise value of approximately $7 billion.
The combination of Crestwood and Inergy creates a diverse platform of
midstream assets providing broad-ranging services in the premier shale plays
in North America including the Marcellus Shale, Bakken Shale, Eagle Ford
Shale, Permian Basin, Powder River Basin Niobrara Shale, Utica Shale, Barnett
Shale, Fayetteville Shale, Granite Wash, Haynesville Shale and Monterey Shale.
The complementary services offered by Crestwood and Inergy create attractive
operational and financial synergies. In addition, enhanced scale and
diversification provide further financial flexibility to position the combined
partnership to be a formidable competitor for major greenfield development and
acquisition opportunities across the midstream value chain. Further, the
combination of a significant portfolio of long-term, fee-based contracts with
high-quality customers, coupled with a sizable backlog of organic capital
opportunities across multiple geographies, provides meaningful visibility to
long-term growth.
Under the terms of the definitive transaction agreements, which have been
approved by the boards of directors and independent committees of Crestwood
and Inergy, the combination will be implemented through a series of
transactions, which will result in Crestwood Holdings acquiring the general
partner, and thus control, of Inergy L.P. Crestwood's Chairman, President and
Chief Executive Officer, Robert G. Phillips, will lead Inergy L.P. following
completion of the transactions, and will serve as Chairman, President and
Chief Executive Officer of the combined company. Until all of the
transactions have closed, Crestwood Midstream and Inergy Midstream will
continue to operate as separate, independent companies.
The terms of the agreements are as follows: Crestwood Holdings will acquire
the general partner of Inergy L.P. and will contribute the general partner and
incentive distribution rights of Crestwood Midstream to Inergy L.P. in
exchange for Inergy L.P. common units. Separately, Crestwood Midstream will
be merged with a subsidiary of Inergy Midstream. In the merger, Crestwood
Midstream unitholders will receive 1.070 common units of Inergy Midstream for
each unit of Crestwood Midstream they own, representing a 5% premium to the
20-day volume weighted average price ("VWAP") of Crestwood Midstream's common
units. Additionally, all Crestwood Midstream public unitholders other than
Crestwood Holdings will receive a one-time cash payment at closing of the
merger of approximately $35 million in the aggregate, or $1.03 per unit, $25
million of which will be payable by Inergy Midstream and approximately $10
million of which will be payable by Crestwood Holdings. Inergy Midstream and
Inergy L.P. will continue to be listed on the NYSE under the ticker symbols
NRGM and NRGY, respectively.
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