USA Compression Closes Acquisition of Energy Transfer Partners' Compression Business.
MANews-(C)2009-2018
4 April 2018 - Texas, US-based compression services provider USA Compression Partners, LP (NYSE: USAC) has closed the acquisition of the compression business of US-based oil and gas companies Energy Transfer Partners, LP (NYSE: ETP) and Energy Transfer Equity, KP (NYSE: ETE) in a deal valued at approximately USD 1.8bn, the company said.
The transaction provides for the acquisition of ETP subsidiaries CDM Resource Management LLC and CDM Environmental and Technical Services LLC by USAC, and the cancellation of the incentive distribution rights in USAC and conversion of the general partner interest in USAC into a non-economic general partner interest.
The transaction will extend USAC's geographic reach into active basins, including Eagle Ford Shale, Gulf Coast, Rockies and Permian Basin.
ETP contributed the CDM business to USAC in exchange for USD 1.225bn in cash, approximately 19.2m USAC common units and approximately 6.4m USAC class B units.
ETE acquired all of the equity interests in USAC's general partner, USA Compression Partners GP, LLC and approximately 12.5m USAC common units from USA Compression Holdings in exchange for USD 250m cash.
USAC obtained committed financing for the USD 1.225bn cash consideration payable to ETP through a USD 500m perpetual preferred units offering to investment funds managed or sub-advised by EIG Global Energy Partners and other investment vehicles unaffiliated with EIG, as well as USD 725m in committed debt financing from JPMorgan and Barclays.
CDM currently owns and operates approximately 1.6m horsepower of natural gas compression and is focussed primarily on large horsepower applications.
The acquisition of CDM is expected to provide significant benefits for USAC unitholders as the combined business will have increased geographic coverage and will be one of the leading domestic compression providers. The acquisition will further expand USAC's geographic presence into regions where USAC is currently underrepresented and will result in USAC having broad coverage across US regions.
As part of its overall service offerings, CDM also provides a full range of gas treating and emissions testing services. CDM's treating activities will also complement USAC's growing station services offerings, in which USAC provides turnkey gas handling solutions for customers.
USAC said its acquisition of CDM is a combination of two compression service providers, operating in different areas of geographic...
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