HOUSTON–(BUSINESS WIRE)–Crestwood Equity Partners LP (NYSE: CEQP) (“Crestwood Equity”) and Crestwood Midstream Partners LP (NYSE: CMLP) (“Crestwood Midstream”) (collectively “Crestwood”) today announced the closing of the merger between Crestwood Equity and Crestwood Midstream following approval of the merger by Crestwood Midstream’s unitholders. Crestwood Equity’s common units will continue to trade on the New York Stock Exchange under the symbol CEQP, while Crestwood Midstream’s common units will cease to be traded on the New York Stock Exchange after the close of business on September 30, 2015.
“We appreciate the support of a substantial majority of the Crestwood Midstream unitholders who voted in favor of the merger. We believe the merged partnership will be better positioned to create long-term value for our unitholders with the simplified structure and lower costs that result from the combination,” commented Robert G. Phillips, Chairman, President and Chief Executive Officer. “Crestwood remains focused on delivering solid operational results during the remainder of 2015 and new project development opportunities around our existing platform despite the uncertainty created by the current commodity cycle and its impact on midstream MLP valuations in the capital markets. With the merger complete, Crestwood is well positioned in 2016 and beyond to expand our business through long-term infrastructure investments in the areas that we operate.”
Michael France, Managing Director of First Reserve, the substantial owner of Crestwood’s general partner added, “We are pleased to see significant limited partner support for the merger and believe this is the next step to realizing the full potential of Crestwood’s business. We know it is a difficult period for the energy industry, but we remain committed to assisting in the growth and development of Crestwood’s operating platform, which First Reserve believes is located in some of the most prolific shale plays in the US. While it might take some time to fully realize the benefits of these opportunities, given the current commodity cycle, the simplified partnership structure should make Crestwood more competitive for growth opportunities and therefore more attractive to long-term midstream investors.”
Under the terms of the merger agreement, each Crestwood Midstream common unitholder (other than Crestwood Equity and its affiliates) will receive 2.75 common units of Crestwood Equity for every one common unit of Crestwood Midstream owned. Beginning in the third quarter of 2015, Crestwood Midstream unitholders will begin receiving quarterly distributions for all Crestwood Equity units received through the merger transaction. Crestwood Equity’s annual distribution is currently $0.55 per common unit and is paid in accordance with Crestwood Equity’s partnership agreement. Crestwood Midstream’s incentive distribution rights were cancelled upon completion of the merger, and Crestwood Midstream now operates as a wholly-owned subsidiary of Crestwood Equity. In conjunction with the merger, Crestwood Midstream today entered into an amended and restated credit agreement establishing a $1.5 billion revolving credit facility. The five-year credit facility will be available to fund Crestwood’s on-going working capital and capital requirements.