Southcross Energy Partners LP (NYSE: SXE) announced June 12 that it will form a new Eagle Ford-focused company through a merger with TexStar Midstream Services LP, a privately held gas gathering and processing partnership.

Dallas-based Southcross will gain roughly one-third of TexStar’s assets for some $450 million. The newly formed company, Southcross Holdings LP, will own TexStar’s remaining assets, which will be offered to Southcross as drop-down acquisitions over time.

Southcross Holdings will consist of four processing plants, three fractionation facilities and about 3,700 miles of pipeline within the Eagle Ford Shale of South Texas. Together with Southcross, it will operate the 685 million cubic feet per day (MMcf/d) of processing capacity and more than 90,000 barrels per day of fractionation capacity.

The businesses are highly complementary of each other, said David Biegler, chairman and CEO of Southcross' general partner in a June 12 news release.

"The enhanced asset base and potential for further drop-downs, we believe, give us a clear path to generate significant distribution and value growth for our unitholders,” he said.

The companies will proceed with ongoing projects including Southcross’ Webb Pipeline, TexStar’s expansion of its Lancaster Gathering System and TexStar’s start-up of its fractionation facility near Corpus Christi.

Southcross will continue to own and operate its existing Mississippi and Alabama properties.

EIG Global Energy Partners, Charlesbank Capital Partners and Tailwater Capital will each indirectly own about one-third of Southcross Holdings. Southcross Holdings will own 100% of Southcross’ general partner and its equity interests.