American Midstream Partners (AMID) is set to form $3bn partnership after it agreed to acquire some assets of Southcross Holdings. It has also proposed to merge Southcross Energy Partners into a wholly owned subsidiary of AMID in two separate transactions valued at approximately $815 million. 

American Midstream, Chairman, President and Chief Executive Officer, Lynn L. Bourdon, III 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.

“The addition of the Southcross assets allows us to capture the full midstream value chain in the very prolific Eagle Ford basin. The transaction represents a unique opportunity to expand our onshore gathering, processing and transmission services, linking supplies from the economically attractive Eagle Ford shale to high demand growth markets along the Gulf Coast.”

Once complete AMID will own and operate complementary and integrated midstream infrastructure representing: approximately 8,000 miles of crude, natural gas and NGL pipelines; over 2.5 Bcf/d of natural gas transmission capacity;

10 processing plants with over 1.0 Bcf/d of capacity; six fractionation facilities with 111,500 Bbl/d of capacity; 

35.7% of Delta House floating production facility in the deep-water Gulf of Mexico, and 6.7 million barrels of above-ground liquids storage capacity.

Lynn said: “Given the compelling rationale for the acquisition, we anticipate that our combined unitholders should benefit from the partnership’s increased scale, greater financial flexibility, and operational density. The integration and commercialization of the acquired assets will contribute to our growth and help establish solid distribution growth over time.” 

President and Chief Executive Officer of Southcross’ general partner, Bruce A. Williamson said: “This combination with American Midstream provides significant benefits to all of Southcross’ stakeholders. Private and public equity holders from both Southcross Holdings and Southcross Energy will be able to participate in a more diverse, sustainably capitalized company with units that offer immediate cash distributions and strong coverage. In addition, the revolver and term debt holders at both Southcross companies will be repaid in full at closing. We look forward to working with Lynn and his team during the transition to create value for our investors.”

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2nd Nov 2017

2nd November 2017