American Midstream Partners To Acquire Southcross Energy Partners - Quick Facts

(RTTNews) - American Midstream Partners, LP (AMID) announced an agreement to acquire certain assets of Southcross Holdings, LP, and has proposed to merge Southcross Energy Partners, L.P. (SXE) into a subsidiary of American Midstream Partners in two separate transactions valued at approximately $815 million, including the repayment of net debt. Public unitholders of Southcross Energy Partners will receive 0.160 AMID common units for each SXE common unit in a unit-for-unit merger.

AMID has agreed to acquire equity interests in certain Southcross Holdings' subsidiaries that directly or indirectly own 100% of the limited liability company interests of the general partner of SXE and approximately 55% of the SXE common units by issuing 3.4 million AMID common units, 4.5 million new Series E convertible preferred units, options to acquire 4.5 million AMID common units and the repayment of $139 million of estimated net debt.

Lynn Bourdon, III, CEO of American Midstream, said: "This transaction accelerates our transformation into a fully integrated gathering, processing and transmission company focused in select core areas. The transaction also furthers our strategy of redeploying capital into higher growth businesses along with divesting non-core assets at attractive multiples."

AMID expects the transaction to be single-digit accretive to DCF/unit in 2018 and 2019, approaching double-digit accretion in 2020. AMID expects to maintain a pro forma distribution coverage of 1.1 to 1.3 times. AMID expects the combined company to generate 2018 annualized Adjusted EBITDA in excess of $300 million, with a pro forma enterprise value of approximately $3 billion. AMID and Southcross expect to realize financial synergies of approximately $15 to $20 million annually within 18 months of closing.

AMID anticipates divesting an additional $400 to $500 million of non-core asset sales to solidify its balance sheet and allocate growth capital toward high return, organic gathering and processing assets.