Alliance Resource Partners To Buy Remaining White Oak Equity Interests

(RTTNews) - Alliance Resource Partners L.P. (ARLP) announced that it has reached agreement to acquire from White Oak Finance, Inc. and other parties all of the equity interests in White Oak Resources LLC or "White Oak" not currently owned by ARLP.

Upon closing of the transaction, Alliance WOR Processing, LLC, a wholly-owned subsidiary of ARLP, will assume operating control of the White Oak Mine No. 1. Following the transaction, ARLP will own 100 percent of the equity interests in White Oak, coal reserves at the White Oak Mine No. 1 that are leased to White Oak and the preparation plant and loading facilities at Mine No. 1.

Under the terms of the agreement, ARLP will pay $50 million cash at closing. Additional contingent consideration may be due in the future, which ARLP believes has a nominal present value based upon current market conditions.

ARLP estimates cost synergies at White Oak of $12 million to $18 million annually beginning next year as result of this transaction. After closing, ARLP will account for its White Oak investments on a consolidated basis instead of as an equity investment.

The impact of this transaction on ARLP's financial statements as well as updated guidance for this year will be provided in ARLP's 2015 second quarter earnings release.

ARLP noted that it plans to fund the payment due at closing with cash on hand and availability under its current credit facilities. The transaction is subject to certain approvals and other customary conditions. ARLP currently anticipates consummation of the proposed transaction within 30 days.