Inergy, L.P. Contributes US Salt To Inergy Midstream, L.P.
Inergy, L.P. (NYSE:NRGY) (NRGY) announced today that it has contributed 100% of the membership interests in US Salt, LLC (US Salt) to Inergy Midstream, L.P. (NYSE:NRGM) (NRGM) for consideration of $192.5 million.
“The drop-down of US Salt represents the first transaction between NRGY and NRGM and efficiently strengthens NRGY’s balance sheet. This transaction, along with the pending retail propane divestiture, transforms NRGY into a partnership with financial flexibility and a platform for growth. NRGY owns solid operating businesses with upside potential and participates in the growth of NRGM via its majority equity ownership and ownership of the incentive distribution rights in NRGM,” said John Sherman, President and CEO of NRGY.
The consideration of $192.5 million received in connection with the contribution of US Salt consists of $182.5 million of cash and $10 million of NRGM common units issued directly to NRGY. The cash proceeds will be used to repay outstanding borrowings under NRGY’s revolving credit facility. Pro forma for the contribution transaction, NRGY owns approximately 56.4 million limited partner units of NRGM, representing an approximate 75% ownership interest.
Terms of the transaction were unanimously approved by the Board of Directors of NRGY’s general partner based on the recommendation from its Conflicts Committee.About Inergy, L.P. Inergy, L.P., also headquartered in Kansas City, Missouri, is a publicly traded master limited partnership. Inergy’s operations include the retail marketing, sale, and distribution of propane to residential, commercial, industrial, and agricultural customers from customer service centers throughout the United States. The company also operates a natural gas storage business in Texas and an NGL supply logistics, transportation, and wholesale marketing business that serves customers in the United States and Canada. Through its general partner interest and majority equity ownership interest in Inergy Midstream, L.P. (NYSE:NRGM), Inergy is also engaged in the development and operation of natural gas and NGL storage and transportation business in the Northeast region of the United States.
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