NGL Energy Partners LP Announces Offer to Acquire Outstanding Units of TransMontaigne Partners L.P.

TULSA, Okla.--()--NGL Energy Partners LP (NYSE:NGL) today announced that it has submitted a non-binding proposal to the conflicts committee of the board of directors of TransMontaigne GP L.L.C., the general partner of TransMontaigne Partners L.P. (NYSE:TLP), in which each outstanding common unit of TLP would be exchanged for one common unit of NGL. The proposed transaction is subject to the negotiation and execution of a definitive agreement, the approval of the TransMontaigne GP L.L.C. board of directors and its conflicts committee and any requisite unitholder approval under applicable law.

Following is the text of the letter that NGL sent to the conflicts committee of the board of directors of TransMontaigne GP L.L.C. on July 10, 2014:

Conflicts Committee of the Board of Directors
TransMontaigne GP L.L.C.
1670 Broadway, Suite 3100
Denver, CO 80202

Dear Sirs:

As you are aware, NGL is pleased to have completed the acquisition of TransMontaigne Inc. We believe the logical next step is to combine NGL and TLP in a transaction that expands our commercial opportunities, simplifies the organizational structure and captures operational synergies, all of which enhance the growth profile of both partnerships’ unitholders.

Accordingly, on behalf of NGL Energy Partners LP (“NGL”), I am pleased to submit a proposal to acquire all of TransMontaigne Partners L.P. (“TLP”) outstanding publicly-held units through a unit-for-unit exchange. Subject to negotiation and execution of a definitive agreement, NGL would offer one NGL common unit for each outstanding TLP common unit as part of a transaction that would be structured as a merger of TLP with a wholly-owned subsidiary of NGL (the “Transaction”).

We believe the proposed Transaction provides substantial value and strategic merits to the unitholders of TLP with minimal execution risk, including, among other things:

  • Enhanced distribution growth to TLP common unitholders in the near and long-term.
  • Opportunity to participate in the margin based business captured by the former owner of TLP’s general partner.
  • Access to substantial capital to fund growth projects and share in NGL’s current projects.
  • Immediate benefit from NGL's scale and diversified business platform that includes water solutions, crude oil, and natural gas liquids.
  • Increased liquidity and public float of the pro forma MLP.
  • Greater common unit coverage, which provides for more visible distribution growth and safety of the current distribution.

Our representatives on the TransMontaigne GP L.L.C. Board will support delegating the authority to evaluate this proposal to the TransMontaigne Conflicts Committee in consultation with its own independent legal counsel and financial advisor.

To that end, we stand ready to facilitate the Conflicts Committee’s due diligence investigation of NGL after execution of a mutually agreeable confidentiality agreement.

This proposal has been approved by NGL’s senior management and reviewed with our Board of Directors. Any definitive agreements will be subject to approval by our Board of Directors and conditioned upon customary closing conditions for transactions of this type.

This letter is not intended to create any binding obligations for TLP or for NGL and any potential transaction will be subject to the execution of definitive documentation and requisite TLP unitholder approval. We do not envision the Transaction being subject to NGL unitholder approval.

If you have any questions regarding this proposal, please do not hesitate to contact me, Michael Krimbill, at 918.477.0541 or michael.krimbill@nglep.com.

NGL expects to engage UBS Investment Bank as financial advisor and Winston & Strawn LLP as legal counsel in connection with the Transaction.

We would like to reiterate our enthusiasm for working together with the TransMontaigne team following our recent acquisition of General Partner and certain Limited Partner interests (the “Interests”). While we feel strongly about the benefits of the Transaction to each of NGL's and TLP's unitholder bases, we are committed to keeping the Interests should we not be able to reach an agreement on the Transaction at this time.

We look forward to your favorable response to this letter and to working with you to complete the Transaction promptly.

Sincerely,

H. Michael Krimbill
Chief Executive Officer and Director
NGL Energy Partners LP

Background

As previously announced, on July 1, 2014, NGL completed its acquisition from Morgan Stanley affiliates of (i) TransMontaigne Inc., the owner of TransMontaigne GP L.L.C., (ii) the limited partnership interest of TransMontaigne Partners L.P. held by TransMontaigne Inc., amounting to approximately 17% of the outstanding common units, (iii) the limited partnership interest of TransMontaigne Partners L.P. held by affiliates of Morgan Stanley, amounting to approximately 3% of the outstanding common units and (iv) certain entities associated with the TransMontaigne business as well as the related inventory and pipeline and other contract rights.

About NGL Energy Partners LP

NGL Energy Partners LP is a Delaware limited partnership. NGL owns and operates a vertically integrated energy business with five primary businesses: water solutions, crude oil logistics, NGL logistics, refined products / renewables and retail propane. NGL completed its initial public offering in May 2011. For further information, visit NGL’s website at www.nglenergypartners.com.

About TransMontaigne Partners L.P.

TransMontaigne Partners L.P. is a terminaling and transportation company based in Denver, Colorado, with operations along the Gulf Coast, in the Midwest, in Brownsville, Texas, along the Mississippi and Ohio Rivers and in the Southeastern United States. TransMontaigne Partners L.P. provides integrated terminaling, storage, transportation and related services for companies engaged in the distribution and marketing of light refined petroleum products, heavy refined petroleum products, crude oil, chemicals, fertilizers and other liquid products. Light refined products include gasolines, diesel fuels, heating oil and jet fuels; heavy refined products include residual fuel oils and asphalts. TransMontaigne Partners L.P. does not purchase or market products that it handles or transports.

Cautionary Statement Concerning Forward–Looking Statements

This press release includes “forward-looking statements.” All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties. While NGL believes its expectations as reflected in the forward-looking statements are reasonable, NGL can give no assurance that such expectations will prove to be correct. The forward-looking statements involve risks and uncertainties that affect operations, financial performance, and other factors as discussed in filings with the Securities and Exchange Commission (“SEC”). Other factors that could impact any forward-looking statements are those risks described in NGL’s annual report on Form 10-K, quarterly reports on Form 10-Q, and other filings with the SEC. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading “Risk Factors.” Risks and uncertainties relating to the proposed transaction include, without limitation, the risks that: TransMontaigne Partners L.P. will not enter into any definitive agreement with NGL Energy Partners LP or the terms of any definitive agreement will be materially different from those described above; the parties will not obtain the requisite financing or regulatory approval for the proposed transaction; the proposed transaction will not be consummated for any other reason; management’s attention will be diverted from ongoing business operations; and the anticipated benefits of the transaction will not be realized. NGL undertakes no obligation to publicly update or revise any forward-looking statements except as required by law.

Additional Information About the Proposed Transaction and Where to Find It

This communication relates to a business combination transaction with TransMontaigne Partners L.P. proposed by NGL Energy Partners LP, which may become the subject of a registration statement filed with the SEC. This communication is not a substitute for the joint proxy statement/prospectus that NGL Energy Partners LP and TransMontaigne Partners L.P. would file with the SEC if any agreement is reached or any other documents that NGL Energy Partners LP or TransMontaigne Partners L.P. may send to unitholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ALL OTHER RELEVANT DOCUMENTS IF, AND WHEN, THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. All such documents, if filed, would be available free of charge at the SEC’s website (http://www.sec.gov). In addition, investors and security holders may obtain free copies of such documents filed by NGL Energy Partners with the SEC by directing a request to: NGL Energy Partners, 6120 S. Yale Avenue, Suite 805, Tulsa, Oklahoma 74136, Attention: Investor Relations. This communication shall not constitute an offer to buy or solicitation of an offer to sell any securities, nor shall there be any sale of securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Participants

NGL Energy Partners LP and the directors and executive officers of NGL Energy Holdings LLC, its general partner, may be deemed, under the rules of the SEC, to be participants in any solicitation of unitholders of NGL Energy Partners LP or TransMontaigne Partners L.P. in connection with the proposed transaction. Investors and security holders may obtain information regarding the names, affiliations and interests of the directors and executive officers of NGL Energy Holdings LLC in NGL Energy Partners LP’s annual report on Form 10–K for the year ended March 31, 2014, which was filed with the SEC on May 30, 2014, which can be obtained free of charge at the SEC’s website (http://www.sec.gov) and from Investor Relations at NGL Energy Partners LP at the address set forth above. Additional information regarding the interests of these participants will also be included in any proxy statement/prospectus and other relevant documents to be filed with the SEC in connection with the proposed transaction when they become available.

Contacts

NGL Energy Partners LP
Atanas H. Atanasov, 918-481-1119
Chief Financial Officer and Treasurer
atanas.atanasov@nglep.com

Release Summary

NGL ENERGY PARTNERS LP ANNOUNCES OFFER TO ACQUIRE OUTSTANDING UNITS OF TRANSMONTAIGNE PARTNERS L.P.

Sharing

Contacts

NGL Energy Partners LP
Atanas H. Atanasov, 918-481-1119
Chief Financial Officer and Treasurer
atanas.atanasov@nglep.com