HOUSTON--(BUSINESS WIRE)--American Midstream Partners, LP (NYSE:AMID) (“AMID” or “Partnership”) announced today the acquisition of 100% of the assets in Panther Asset Management, LLC (“Panther”) for a total consideration of approximately $52 million. The consideration consisted of approximately $39 million cash from borrowings under the Partnership’s revolving credit facility and common units representing limited partner interests.
The underlying assets acquired are highly complementary with AMID’s core Gulf of Mexico assets as a substantial portion of Panther’s cash flows are generated by AMID joint ventures. Through the purchase, AMID will acquire Panther’s 33.3% equity interests in Main Pass Oil Gathering (“MPOG”), as well as Panther’s 40% equity interest in American Panther, LLC (“AmPan”). As such, the Partnership will now own 100% of MPOG and AmPan.
MPOG currently provides crude oil transportation services in the Main Pass, Viosca Knoll and Mississippi Canyon areas with onshore Louisiana delivery to either Delta or Cypress pipelines to the Empire Terminal. MPOG has crude oil capacity of 160 MBbls/day and has approximately 98 miles of large and mid-diameter pipelines from four offshore platforms. AmPan provides crude oil and natural gas transportation services from the South Marsh Island area offshore to an onshore station near Henry Hub in Vermillion Parish, LA for crude oil and the Henry Hub for natural gas. In total, the AmPan system encompasses approximately 200 miles of crude oil, natural gas, and salt water onshore and offshore Gulf of Mexico pipeline.
Consolidating MPOG and AmPan into the Partnership’s Gulf of Mexico portfolio continues the strategy of enhancing its gulf coast asset base, providing its customers with strong interconnectivity that allow for multiple product delivery points product delivery; as well as solidly position AMID as a Gulf of Mexico crude oil pipeline operator.
The acquisition of Panther is an important part of the Partnership capital redeployment strategy. Coupled with the recently announced Viosca Knoll acquisition on June 2, 2017, AMID has effectively redeployed $85 million of the anticipated proceeds from the sale of Propane Marketing and Services business announced on July 24, 2017. The acquisition of Panther is accretive to 2017 Adjusted EBITDA and distributable cash flow and is expected to earn returns consistent with a mid-single digit cash flow multiple.
“We are excited about further integrating this strategic asset as part of our long-term Gulf Coast strategy. The acquisition of Panther is a strong and tactical fit that will provide another step to creating the premier gulf system,” stated Lynn Bourdon III, President and Chief Executive Officer. “The Panther team has a strong history of being able to execute in high valued projects and we look forward to working with them as part of AMID.”
Panther wholly owns three active operating companies (the “Panther Companies”) that are engaged in various aspects of the oil and gas midstream business. The Panther Companies own and/or operate/manage more than 1,000 miles of oil and gas pipelines, primarily in Texas and Louisiana offshore state and federal waters. Each of the Panther Companies is a distinct entity with its own field of operations determined by business plan, geographical, and regulatory considerations.
About American Midstream Partners, LP
American Midstream Partners, LP is a growth-oriented limited partnership formed to provide critical midstream infrastructure that links producers of natural gas, crude oil, NGLs, condensate and specialty chemicals to end-use markets. American Midstream’s assets are strategically located in some of the most prolific onshore and offshore basins in the Permian, Eagle Ford, East Texas, Bakken and Gulf Coast. American Midstream owns or has an ownership interest in approximately 4,000 miles of interstate and intrastate pipelines, as well as ownership in gas processing plants, fractionation facilities, an offshore semisubmersible floating production system with nameplate processing capacity of 80 MBbl/d of crude oil and 200 MMcf/d of natural gas; and terminal sites with approximately 6.7 MMBbls of storage capacity. The Partnership owns the third largest cylinder exchange business and one of the largest regional retail propane providers.
For more information about American Midstream Partners, LP, visit www.americanmidstream.com.
Non-GAAP Financial Measures
This press release includes financial measures in accordance with U.S. generally accepted accounting principles, or GAAP, as well as non-GAAP financial measures, including “Adjusted EBITDA.”
We define distributable cash flow as Adjusted EBITDA, less cash paid for interest expense, normalized maintenance capital expenditures, and distributions related to the Series A, Series C and Series D convertible preferred units. The GAAP financial measure most comparable to distributable cash flow is Net income (loss) attributable to the Partnership.
Forward Looking Statements
This press release includes forward-looking statements. These statements relate to, among other things, projections of operational volumetrics and improvements, growth projects, cash flows and capital expenditures. We have used the words "anticipate,” "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," "will," "potential," and similar terms and phrases to identify forward-looking statements in this press release. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect.
Actual results and trends in the future may differ materially from those suggested or implied by the forward-looking statements depending on a variety of factors, which are described in greater detail in our filings with the SEC. Please see “Risk Factors” and other disclosures included in our Annual Report on Form 10-K for the year ended December 31, 2016 filed on March 28, 2017 and our other filings with the SEC. All future written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the previous statements. The forward-looking statements herein speak as of the date of this press release. We undertake no obligation to update any information contained herein or to publicly release the results of any revisions to any forward-looking statements that may be made to reflect events or circumstances that occur, or that we become aware of, after the date of this press release.