MMLP Completes Dropdown

Purchase of product packaging assets from Cross Oil Refining and Marketing Inc.

Martin Resource Management Corp. has sold two companies to its midstream master limited partnership, Martin Midstream Partners LP (Nasdaq: MMLP) for a total of nearly 272 million.

In the first transaction, MMLP bought certain specialty lubricant product packaging assets from Cross Oil Refining and Marketing Inc., a wholly-owned subsidiary of the parent, for $121.8 million in cash. The purchase of the packaging assets was funded under MMLP’s existing credit facility.

In the second transaction, MMLP bought all the remaining Class A equity interests in Redbird Gas Storage LLC for $150 million in cash. Redbird was formed by the partnership and MRMC to invest in Cardinal Gas Storage partners, a joint venture between Redbird and Energy Capital Partners.

Prior to closing, MMLP owned 10.7% of the Class A shares and 100% of the class B shares in Redbird. After closing Redbird is not a wholly-owned subsidiary of MMLP. In conjunction with the Redbird transaction, MMLP’s general partner has agreed to give up the next $18.0 million in incentive distributions that it would otherwise be entitled to receive. In addition, the general partner has agreed to give up another $7.5 million in incentive distributions if certain cash distribution targets are not achieved in 2015 and 2016.

The following advisors served in their respective roles for both transactions: Simmons & Co. International provided fairness opinions to the Conflicts Committee and to the Board of Directors of the general partner. Munsch, Hardt, Kopf & Harr P.C. acted as legal counsel to the Conflicts Committee and Locke Lord LLP acted as legal counsel to the partnership. Strasburger Price LLP acted as legal counsel to MRMC.