AM, JP in midstream venture

American Midstream Partners and JP Energy Partners are merging to create a combined midstream platform.
American Midstream will acquire 100 percent of JP Energy in a unit-for-unit merger which is expected to have minimal, if any, tax recognition for the unitholders. In conjunction with the transaction, ArcLight Capital Partners, the sponsor of both American Midstream and JP Energy, will combine the general partners of the two companies. On closing, the combined entity is expected to generate adjusted EBITDA of approximately US$185 million, assuming 2016 mid-point guidance from each respective company and including run-rate synergies of approximately $10 million.
The merger 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, third party acquisitions and potential drop downs from ArcLight, while establishing a path to mid-single digit distribution growth over the long-term.