American Midstream to Sell Propane Business for $170 Million
American Midstream Partners, LP (AMID) has entered into a definitive agreement for the sale of the company’s Propane Marketing and Services business to SHV Energy N.V. for $170 million in cash, subject to working capital adjustments.
Under the terms of the transaction, AMID will divest 100% of its propane assets, including Pinnacle Propane’s 40 service locations; Pinnacle Propane Express’ cylinder exchange business and related logistic assets; and the Alliant Gas utility system.
In the second quarter of 2017, the company began executing on a capital optimization strategy to simplify its businesses and redeploy capital from non-core assets toward complementary opportunities in the Partnership’s Gulf of Mexico, Permian Basin and East Texas assets, including the acquisition of the Viosca Knoll system from Genesis Energy, L.P. for total consideration of approximately $32 million. Viosca Knoll serves producing fields located in Main Pass, Mississippi Canyon and Viosca Knoll areas in deep-water Gulf of Mexico that connect to several major delivery pipelines, including AMID’s High Point and Destin pipelines.
“Over the past few months, AMID’s management team has communicated its strategy to strengthen the Partnership’s competitive position in our core areas, evaluate non-core asset sales and reallocate capital to areas with the greatest long-term value,” said Lynn Bourdon, AMID’s Chief Executive Officer. “The sale of the Propane business and acquisition of Viosca Knoll are the first steps in implementing a strategy that achieves these goals.”
The transaction is expected to close in the third quarter of 2017, subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Act.
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