American Midstream Partners to Merge with JP Energy Partners, Creating a $2 Billion Diversified Midstream MLP

American Midstream Partners, October 25, 2016

American Midstream Partners, LP and JP Energy Partners LP have announced their execution of a merger agreement to create a combined midstream platform. American Midstream will acquire 100% of JP Energy in a unit-for-unit merger which is anticipated to have minimal, if any, tax recognition for the unitholders.  In conjunction with the transaction, ArcLight Capital Partners, LLC, the sponsor of both American Midstream and JP Energy, will combine the general partners of the two companies. Upon closing, the combined entity is expected to generate pro-forma Adjusted EBITDA of approximately $185 million, assuming 2016 mid-point guidance from each respective company and including run-rate synergies of approximately $10 million.

The merger of American Midstream and JP Energy will create a diversified midstream business operating in leading North American basins, including the Permian, Gulf of Mexico, Eagle Ford and Bakken. The combined partnership will have an estimated enterprise value of $2 billion and its unitholders are expected to benefit from significantly improved scale and financial flexibility to invest in growth projects, thirdparty acquisitions and potential drop downs from ArcLight, while establishing a path to mid-single digit distribution growth over the long-term.  

The merger elevates and reshapes our two businesses into a new platform that we expect will allow for higher growth, new business opportunities and a stronger financial position than either company could achieve separately,” said Lynn L. Bourdon, III, Chairman, President and Chief Executive Officer of American Midstream.  “This transformational combination is the next logical step in expanding services from the wellhead to the end user market. We will begin to experience the impact of our value chain growth strategy by offering customers a more competitive suite of services that enables us to capture incremental fee opportunities that maximize returns to unitholders.  We look forward to creating further alignment with ArcLight as we execute on our long-term growth strategy.” 

We believe the merger between American Midstream and JP Energy makes a tremendous amount of sense, offering all stakeholders a solidified financial profile on a stronger, more diversified platform with multiple avenues for growth,” added Dan Revers, Managing Partner of ArcLight.  “Through the combination, ArcLight can concentrate its financial and strategic support and work even more closely with Lynn and his team to continue the growth of American Midstream.” 

This merger provides the opportunity for JP Energy unitholders, customers and employees to participate in the creation of a platform of diversified assets with strong growth prospects.  The exchange ratio premium and future growth prospects provide significant investment value to our unitholders,” said J.

Patrick Barley, President and Chief Executive Officer. “Lynn’s extensive experience throughout the energy value chain as well as ArcLight’s continued support of the combined enterprise will help ensure the future success of American Midstream.”



Upon completion of the transaction, the combined partnership will own and operate diverse midstream infrastructure representing: 

  • More than 3,100 miles of gathering and transportation pipeline, 
  • Over 2.5 Bcf/d of transportation capacity, 
  • Six processing plants with 400 MMcf/d of processing capacity, 
  • Three fractionation facilities with 20,000 bpd of capacity, 
  • 13.9% interest of offshore floating production facility (FPS) in the deep-water Gulf of Mexico,
  • Over six million barrels of above-ground liquids storage capacity, and
  • The third largest wholesale propane business in the U.S. 

  • Fuel Long Term Distribution Growth: Establish path to mid-single digit distribution growth over the long-term

Click here to read the full article from American Midstream Partners.

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