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KILGORE, Texas, Oct. 2, 2012 (GLOBE NEWSWIRE) -- Martin Midstream Partners L.P. (Nasdaq:MMLP) ("MMLP" or the "Partnership") announced today the closing of two separate purchase agreements with certain wholly-owned subsidiaries of Martin Resource Management Corporation ("MRMC" or the "Parent"), the owner of Martin Midstream GP LLC (the "General Partner"), the general partner of MMLP.
In the first transaction, MMLP purchased certain specialty lubricant product packaging assets (the "Packaging Assets") from Cross Oil Refining & Marketing, Inc. ("Cross"), a wholly-owned subsidiary of the Parent. Total consideration for the Packaging Assets consisted of $121.8 million in cash, including working capital of approximately $36.8 million at closing, subject to certain post-closing adjustments. The purchase of the Packaging Assets was funded using availability under the Partnership's existing credit facility.
In the second transaction, the Partnership purchased all of the remaining Class A equity interests in Redbird Gas Storage LLC ("Redbird") for $150.0 million in cash. Redbird was formed by the Partnership and MRMC in 2011 to invest in Cardinal Gas Storage Partners ("Cardinal"). Cardinal is a joint venture between Redbird and Energy Capital Partners ("ECP") that is focused on the development, construction, operation and management of natural gas storage facilities across North America. Prior to closing, MMLP owned both a 10.7% Class A and a 100% Class B interest in Redbird. Redbird is now a wholly-owned subsidiary of MMLP which effectively owns a 38.1% fully diluted membership interest in Cardinal. The purchase of the remaining Class A equity interests in Redbird was also funded using availability under the Partnership's existing credit facility.
In conjunction with the Redbird transaction, our General Partner has agreed to relinquish its right to receive the next $18.0 million in incentive distributions that it would otherwise be entitled to from MMLP. Additionally, our General Partner has agreed to relinquish up to an additional $7.5 million in incentive distributions if certain cash distribution targets from Cardinal are not achieved in 2015 and 2016.