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Slide #42. American Midstream — Blackwater Midstream From an Affiliate of ArcLight Capital Partners
American Midstream (AMID)
Blackwater Midstream From an Affiliate of ArcLight Capital Partners
American Midstream Partners, LP (NYSE:AMID) today announced the execution of a merger agreement to acquire Blackwater Midstream Holdings, LLC, a developer and operator of terminal storage facilities ("Blackwater"), from an affiliate of ArcLight Capital Partners, LLC ("ArcLight") for an aggregate purchase price of $60 million, subject to certain purchase price adjustments. The purchase price is payable in a combination of cash and approximately $3.0 million of American Midstream common units, and the aggregate consideration includes the payoff of existing indebtedness of Blackwater. Blackwater generated annualized Adjusted EBITDA of approximately $7.7 million based on the quarter ended September 30, 2013, and the Partnership expects Blackwater's annualized EBITDA to remain approximately the same in the fourth quarter of 2013 and increase in 2014 as a result of organic growth and new-build projects currently underway with new and existing customers. The acquisition includes Blackwater's three operating terminal sites located in Westwego, Louisiana; Brunswick, Georgia; and Salisbury, Maryland. The sites are multimodal, with access to deepwater dock, barge, rail and truck transportation. The transaction also includes a brownfield development opportunity in Harvey, Louisiana, located near Blackwater's Westwego terminal. The acquisition is expected to be immediately accretive to American Midstream's current distribution and creates a strong and competitive position in a segment of the midstream industry that is characterized by fee-based contracts that are not directly subject to commodity price volatility. In addition, the merger agreement provides for American Midstream to pay an earnout of up to $5 million, if, during the next five years, the trailing-twelve month EBITDA from operations at the Harvey site exceeds $5 million.
American Midstream Partners owns, operates, develops and acquires a portfolio of midstream energy assets. Co.'s segments include: Gas Gathering and Processing Services, which provides wellhead-to-market services to producers of natural gas and natural gas liquids; Liquid Pipelines and Services, which purchases and sells crude oil and provides crude oil gathering and transportation services; Natural Gas Transportation Services, which transports and delivers natural gas for shippers and other customers; and Offshore Pipelines and Services, which gathers and transports natural gas and crude oil to other pipeline interconnects, onshore facilities and other delivery points.
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