American Midstream Partners, LP (NYSE:AMID) (“AMID” or “Partnership”) announced today the acquisition of 100% of the assets in Panther Asset Management, LLC (“Panther”) for a total consideration of approximately $52 million. The consideration consisted of approximately $39 million cash from borrowings under the Partnership’s revolving credit facility and common units representing limited partner interests.
“We are excited about further integrating this strategic asset as part of our long-term Gulf Coast strategy. The acquisition of Panther is a strong and tactical fit that will provide another step to creating the premier gulf system”
The underlying assets acquired are highly complementary with AMID’s core Gulf of Mexico assets as a substantial portion of Panther’s cash flows are generated by AMID joint ventures. Through the purchase, AMID will acquire Panther’s 33.3% equity interests in Main Pass Oil Gathering (“MPOG”), as well as Panther’s 40% equity interest in American Panther, LLC (“AmPan”). As such, the Partnership will now own 100% of MPOG and AmPan.
MPOG currently provides crude oil transportation services in the Main Pass, Viosca Knoll and Mississippi Canyon areas with onshore Louisiana delivery to either Delta or Cypress pipelines to the Empire Terminal. MPOG has crude oil capacity of 160 MBbls/day and has approximately 98 miles of large and mid-diameter pipelines from four offshore platforms. AmPan provides crude oil and natural gas transportation services from the South Marsh Island area offshore to an onshore station near Henry Hub in Vermillion Parish, LA for crude oil and the Henry Hub for natural gas. In total, the AmPan system encompasses approximately 200 miles of crude oil, natural gas, and salt water onshore and offshore Gulf of Mexico pipeline.
Consolidating MPOG and AmPan into the Partnership’s Gulf of Mexico portfolio continues the strategy of enhancing its gulf coast asset base, providing its customers with strong interconnectivity that allow for multiple product delivery points product delivery; as well as solidly position AMID as a Gulf of Mexico crude oil pipeline operator.
The acquisition of Panther is an important part of the Partnership capital redeployment strategy. Coupled with the recently announced Viosca Knoll acquisition on June 2, 2017, AMID has effectively redeployed $85 million of the anticipated proceeds from the sale of Propane Marketing and Services business announced on July 24, 2017. The acquisition of Panther is accretive to 2017 Adjusted EBITDA and distributable cash flow and is expected to earn returns consistent with a mid-single digit cash flow multiple.
“We are excited about further integrating this strategic asset as part of our long-term Gulf Coast strategy. The acquisition of Panther is a strong and tactical fit that will provide another step to creating the premier gulf system,” stated Lynn Bourdon III, President and Chief Executive Officer. “The Panther team has a strong history of being able to execute in high valued projects and we look forward to working with them as part of AMID.”
Panther wholly owns three active operating companies (the “Panther Companies”) that are engaged in various aspects of the oil and gas midstream business. The Panther Companies own and/or operate/manage more than 1,000 miles of oil and gas pipelines, primarily in Texas and Louisiana offshore state and federal waters. Each of the Panther Companies is a distinct entity with its own field of operations determined by business plan, geographical, and regulatory considerations.
Source: American Midstream
Date: Aug 8, 2017