Crestwood Unitholders
Crestwood's unitholders approved the proposed merger of Crestwood and Inergy, creating a fully integrated midstream partnership with a total enterprise value of approximately $8 billion.
Crestwood's unitholders have overwhelmingly voted to approve the proposed $8 billion merger of Crestwood and Inergy, Crestwood Midstream Partners LP (NYSE: CMLP), Crestwood Holdings LLC, Inergy LP (NYSE: NRGY) and Inergy Midstream LP (NYSE: NRGM) announced on Oct. 4.
The combination will create a fully integrated midstream company assets providing broad-ranging services in some of the premier shale plays in North America, such as the Marcellus, Bakken, Eagle Ford,Powder River Basin, Niobrara , Utica shale and several others.
At a special meeting of unitholders held on Oct. 4, more than 99% of the votes cast by Crestwood unitholders were in favor of the merger of a subsidiary of Inergy Midstream with Crestwood Midstream, representing approximately 81% of Crestwood's total outstanding units entitled to vote as of the record date of the special meeting. This transaction is expected to close on Oct. 7, completing the final step in the previously announced merger process.
Upon closing, the newly combined entity will be named Crestwood Midstream Partners LP and will trade under the ticker symbol "CMLP" on the New York Stock Exchange beginning on Oct. 8. Additionally, Inergy LP will be renamed Crestwood Equity Partners LP and will trade on the New York Stock Exchange under the ticker symbol "CEQP" beginning on Oct. 8.
"We are very pleased to receive such overwhelming support for this transaction," Robert G. Phillips, Crestwod and Inergy's chairman, president and CEO, said in the release. "Our unitholders clearly recognize the significant value enhancement opportunities that stem from the creation of a fully integrated midstream MLP. We look forward to completing this merger and executing on our strategy to grow the partnership and increase distributable cash flow for our unitholders."
Under the terms of the merger agreement, the combination of Inergy and Crestwood is being effected through a series of transactions. In the first transaction, which closed on June 19, Crestwood Holdings acquired the general partner of Inergy LP for $80 million in cash. Prior to the closing of this transaction, Inergy LP distributed to its unitholders all of the 56.4 million common units that it owned in Inergy Midstream. Upon closing of this transaction, Crestwood Holdings owned the general partner, and thus control, of Inergy LP.
In a second transaction, which also closed on June 19, Crestwood Gas Services Holdings LLC, a wholly owned subsidiary of Crestwood Holdings, contributed to Inergy LP 100% of its interest in Crestwood Gas Services GP LLC, the general partner of Crestwood Midstream that also owns 100% of the incentive distribution rights of Crestwood Midstream, in exchange for 35.1 million common units and 4.4 million subordinated units of Inergy LP.
In the final transaction, Crestwood Midstream unitholders will receive 1.070 units of Inergy Midstream for each unit of Crestwood Midstream they own. Additionally, all Crestwood Midstream public unitholders other than Crestwood Holdings will receive a one-time cash payment at closing of $1.03 per unit. As noted, this transaction is expected to be completed on Oct. 7.
Crestwood Midstream Partners LP primarily engages in the gathering, processing, treating, compressing, transporting, and selling natural gas in the US. The company is headquartered in Houston.
Inergy LP is an integrated energy midstream master limited partnership engaged in the storage and transportation of natural gas and NGLs in the US and Canada. The company is headquartered in Kansas City, Mo.
Inergy Midstream LP, a subsididary of Inergy LP, engages in acquiring, owning, developing, and operating midstream energy assets. The company is based in Kansas City, Mo.