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American Midstream, JP Energy Partners enter $2bn merger deal

Staff Writer |
American Midstream Partners, and JP Energy Partners announced their execution of a merger agreement to create a combined midstream platform.

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American Midstream will acquire 100% of JP Energy in a unit-for-unit merger which is anticipated to have minimal, if any, tax recognition for the unitholders.

In conjunction with the transaction, ArcLight Capital Partners, the sponsor of both American Midstream and JP Energy, will combine the general partners of the two companies.

Upon closing, the combined entity is expected to generate pro-forma Adjusted EBITDA of approximately $185 million, assuming 2016 mid-point guidance from each respective company and including run-rate synergies of approximately $10 million.

The merger of American Midstream and JP Energy will create a diversified midstream business operating in leading North American basins, including the Permian, Gulf of Mexico, Eagle Ford and Bakken.

The combined partnership will have an estimated enterprise value of $2 billion and its unitholders are expected to benefit from significantly improved scale and financial flexibility to invest in growth projects, third-party acquisitions and potential drop downs from ArcLight, while establishing a path to mid-single digit distribution growth over the long-term.

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