This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Crestwood Holdings Completes Acquisition Of Inergy, L.P. General Partner And Contributes General Partner Of Crestwood Midstream Partners LP To Inergy, L.P.

HOUSTON and KANSAS CITY, Mo., June 19, 2013 /PRNewswire/ -- Crestwood Midstream Partners LP (NYSE: CMLP) ("Crestwood Midstream") and Crestwood Holdings LLC ("Crestwood Holdings") (collectively, " Crestwood") and Inergy, L.P. (NYSE:NRGY) and Inergy Midstream, L.P. (NYSE:NRGM) ("Inergy Midstream") (collectively, "Inergy") today announced that, Crestwood Holdings has acquired the general partner, and thus control, of Inergy, L.P.  Additionally, Crestwood Gas Services Holdings LLC, a wholly owned subsidiary of Crestwood Holdings, contributed 100% of its interest in Crestwood Gas Services GP LLC, the general partner of Crestwood Midstream that also owns 100% of the incentive distribution rights of Crestwood Midstream Partners LP, for common units and subordinated units in Inergy, L.P.  These transactions are part of the previously announced definitive agreements to create a fully integrated midstream partnership with a total enterprise value of approximately $7 billion.  The final transaction to complete the proposed combination, the merger of Crestwood Midstream with Inergy Midstream, is expected to occur in the third quarter of 2013.

The combination of Crestwood and Inergy will create a fully integrated midstream MLP linking new shale-based energy supplies with growing energy demand across the midstream value chain. The company will have a diverse platform of midstream assets providing broad-ranging services, from gathering and processing to storage and sales, in the premier shale plays in North America, including the Marcellus Shale, Bakken Shale, Eagle Ford Shale, Permian Basin, Powder River Basin, Niobrara Shale, Utica Shale, Barnett Shale, Fayetteville Shale, Granite Wash, Haynesville Shale and Monterey Shale. 

In addition, and as outlined in prior announcements, Robert G. Phillips, current Chairman, President and Chief Executive Officer of Crestwood Midstream, has been named Chairman, President and Chief Executive Officer of the general partners of Inergy, L.P. and Inergy Midstream, effective immediately.  Prior Inergy Chairman and Chief Executive Officer, John J. Sherman, and President, R. Brooks Sherman, Jr., have stepped down from day-to-day management roles; however, John J. Sherman will continue to serve on the Boards of Directors of the general partners of Inergy, L.P. and Inergy Midstream.  Until the completion of the merger, both Crestwood Midstream and Inergy Midstream will continue to operate as separate, independent companies under the leadership of Mr. Phillips.

"This is an important first step forward in the process of combining our two companies to create a fully integrated midstream partnership with the size and scale required by our industry to compete for the largest midstream infrastructure projects," Mr. Phillips said.  "Together, we will be able to capitalize on new growth opportunities stemming from our ability to offer a more comprehensive and competitive suite of customer services that expand margins and enhance returns on investment.  The improved visibility to growth will be a key benefit of the transaction for our investors.  With the general partners now consolidated, prior to the merger we will be focusing on an efficient integration of our assets and organizations to leverage our diverse midstream operating platform  by providing 'best-in–class' customer services in the premier shale plays across North America."

Governance Details

In addition to Mr. Phillips, Michael G. France, Managing Director at First Reserve and Managing Member of Crestwood Holdings, has been named to the Boards of Directors of the general partners of Inergy, L.P. and Inergy Midstream.  In connection with today's transactions, Phillip L. Elbert has stepped down from the Board of Directors of the general partner of Inergy, L.P., effective immediately.  Prior to completion of the merger, Crestwood Holdings and Inergy, L.P. will designate three additional directors to each of the respective Boards of Directors of the general partners of Inergy, L.P. and Inergy Midstream.    

Upon final completion of the combination, the new partnership will be headquartered in Houston, Texas with executive offices in Kansas City, Missouri and Fort Worth, Texas.  The executive management team, which is expected to include senior executives from both companies, will be announced prior to completion of the merger.

Transaction Details

As previously announced, the combination of Inergy and Crestwood will be effected through a series of transactions.  In the first transaction, which closed today, Crestwood Holdings has acquired the general partner of Inergy, L.P. for $80 million in cash.  Prior to the closing of this transaction, Inergy, L.P. distributed to its unitholders all of the approximately 56.4 million common units that it owned in Inergy Midstream.  Upon closing of this transaction, Crestwood Holdings owns the general partner, and thus control, of Inergy, L.P. 

In a second transaction, which also closed today immediately after the first transaction, Crestwood Gas Services Holdings LLC, a wholly owned subsidiary of Crestwood Holdings, contributed to Inergy, L.P. 100% of its interest in Crestwood Gas Services GP LLC, the general partner of Crestwood Midstream that also owns 100% of the incentive distribution rights of Crestwood Midstream, in exchange for approximately 35.1 million common units and approximately 4.4 million subordinated units of Inergy, L.P.  Crestwood Holdings has also entered into an agreement that provides that it will have the option to contribute to Inergy, L.P. approximately 7.1 million of the Inergy Midstream common units it receives in the merger described below (or in the event the merger agreement is terminated, approximately 6.7 million Crestwood Midstream Units) in exchange for approximately 14.3 million common units of Inergy, L.P., which if exercised would result in it owning approximately 29% of the total common units of Inergy, L.P. outstanding.  

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

DOW 17,730.11 -27.80 -0.16%
S&P 500 2,076.78 -0.64 -0.03%
NASDAQ 5,009.2140 -3.9090 -0.08%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs