Deal Description: On May 3, 2020, Summit Midstream Partners, LP (“SMLP”), announced that it has entered into a definitive agreement with Energy Capital Partners II, LLC (“ECP”) to acquire Summit Midstream Partners, LLC (“Summit Investments”), the privately held company that indirectly owns SMLP’s general partner, Summit Midstream GP, LLC (the “GP”), as well as 5.9 million SMLP common units owned by ECP, for $35 million in cash plus warrants covering 10 million SMLP common units (the “GP Buy-in Transaction”).
As part of the GP Buy-in Transaction, ECP will lend the full $35 million of cash proceeds back to SMLP, which SMLP intends to utilize to enhance its liquidity position and for general corporate purposes. The acquisition will result in a more simplified corporate structure whereby Summit Investments and all of its subsidiaries will become wholly owned subsidiaries of SMLP.
Summit Investments owns 100% of Summit Midstream Partners Holdings, LLC (“SMP Holdings”), which owns 100% of the GP, 45.3 million SMLP common units, cash on hand, and the $180.75 million deferred purchase price obligation receivable, all of which will remain outstanding as of the closing. SMP Holdings will continue as the borrower under a $158.2 million term loan, which is secured by approximately 34.6 million of the SMLP common units owned by SMP Holdings and the GP interest.
Upon the closing of the GP Buy-in Transaction, all directors affiliated with ECP will resign from the Board of Directors of the GP (the “Board”) and the Board will be comprised of a majority of independent directors who will be subject to public election on a staggered basis beginning in 2022.
SMLP expects the GP Buy-in Transaction to close in the second quarter of 2020, subject to certain closing conditions.
Baker Botts L.L.P. represented SMLP in this transaction.
Baker Botts Lawyers/Office Involved:
Corporate: Joshua Davidson (Partner, Houston); Jason Rocha (Partner, Houston); Sarah J. Dodson (Senior Associate, Houston); Emmie Proctor (Associate, Houston); Rachel Collier (Associate, Houston); Justin Hoffman (Partner, Houston); Jeremy Moore (Partner, Houston)
Employee Benefits: Eric Winwood (Partner, Dallas)
For more information, please see SMLP’s news release by clicking here.
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