WHIPPANY, N.J., April 26, 2012 /PRNewswire/ -- Suburban Propane Partners, L.P. (NYSE: SPH) (" Suburban"), announced that it has reached a definitive agreement with Inergy, L.P. (NYSE: NRGY) (" Inergy"), Inergy GP, LLC and Inergy Sales & Service, Inc. (" Inergy Sales") to acquire (the " Inergy Propane Acquisition") the sole membership interest in Inergy Propane, LLC, now owned by Inergy, including certain wholly-owned subsidiaries of Inergy Propane, LLC, and the assets of Inergy Sales (such interests and assets collectively, " Inergy Propane"). At the time of the closing of the Inergy Propane Acquisition, and following certain pre-closing transactions, Inergy Propane will consist of the retail propane assets and operations of Inergy.
Suburban is acquiring Inergy Propane for total consideration of approximately $1.8 billion, consisting of: (i) $1.0 billion of newly issued Suburban senior notes and $200.0 million in cash (as described in a separate press release issued today) and, (ii) $600.0 million of new Suburban common units, which will be distributed to Inergy and Inergy Sales, the majority of which will subsequently be distributed by Inergy to its unitholders.
Inergy Propane conducts its propane operations in 33 states from 338 customer service centers. Based on fiscal year 2011, the Inergy Propane Acquisition will add approximately 600,000 propane customers and 325 million retail propane gallons to Suburban's existing approximately 600,000 propane customers and nearly 300 million retail propane gallons sold. Suburban believes that after giving effect to this transaction it will be the third largest retail marketer of propane in the United States, measured by retail gallons sold in the calendar year 2011.
Michael J. Dunn, Jr., President and Chief Executive Officer, said, "This acquisition is an important strategic step for Suburban by effectively doubling the size of the company and expanding our national presence into eleven new states. We were uniquely positioned to take advantage of this opportunity as a result of all of our efforts over the past several years to streamline our operating model, invest in our technology platform and strengthen our financial position. We look forward to welcoming the employees of Inergy Propane, recognizing their dedication to customer service, which has helped Inergy grow to become one of the largest propane marketers in the country."Mr. Dunn continued, "Our growth strategy is well served by this acquisition as we seek to combine the best of both companies, leveraging our investments in people and technology across a broader service territory and customer base. Together we will strive toward furthering our goal of delivering sustainable, profitable growth for our unitholders and strengthening our commitment to delivering outstanding service to our valued customers."
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