... American Midstream Partners to Merge with JP Energy Partners

American Midstream Partners to Merge with JP Energy Partners

American Midstream Partners_Logo_cAmerican Midstream Partners LP and JP Energy Partners LP executed a merger agreement to create a combined midstream platform where American Midstream will acquire 100 percent of JP Energy in a unit-for-unit merger.

In conjunction with the transaction, ArcLight Capital Partners LLC, the sponsor of both American Midstream and JP Energy, will combine the general partners of the two companies. Upon closing, the combined entity is expected to generate pro-forma Adjusted EBITDA of approximately $185 million, assuming 2016 mid-point guidance from each respective company and including run-rate synergies of approximately $10 million.

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The merger of American Midstream and JP Energy will create a diversified midstream business operating in leading North American basins, including the Permian, Gulf of Mexico, Eagle Ford and Bakken. The combined partnership will have an estimated enterprise value of $2 billion and its unitholders are expected to benefit from significantly improved scale and financial flexibility to invest in growth projects, third-party acquisitions and potential drop downs from ArcLight, while establishing a path to mid-single digit distribution growth over the long-term.

“The merger elevates and reshapes our two businesses into a new platform that we expect will allow for higher growth, new business opportunities and a stronger financial position than either company could achieve separately,” said Lynn L. Bourdon, III, chairman, president and CEO of American Midstream. “This transformational combination is the next logical step in expanding services from the wellhead to the end user market. We will begin to experience the impact of our value chain growth strategy by offering customers a more competitive suite of services that enables us to capture incremental fee opportunities that maximize returns to unitholders. We look forward to creating further alignment with ArcLight as we execute on our long-term growth strategy.”

“We believe the merger between American Midstream and JP Energy makes a tremendous amount of sense, offering all stakeholders a solidified financial profile on a stronger, more diversified platform with multiple avenues for growth,” added Dan Revers, managing partner of ArcLight. “Through the combination, ArcLight can concentrate its financial and strategic support and work even more closely with Lynn and his team to continue the growth of American Midstream.”


  • Upon completion of the transaction, the combined partnership will own and operate diverse midstream infrastructure representing:
  • More than 3,100 miles of gathering and transportation pipeline,
  • Over 2.5 Bcf/d of transportation capacity,
  • Six processing plants with 400 MMcf/d of processing capacity,
  • Three fractionation facilities with 20,000 bpd of capacity,
  • 13.9% interest of offshore floating production facility (FPS) in the deep-water Gulf of Mexico,
  • Over six million barrels of above-ground liquids storage capacity, and
  • The third largest wholesale propane business in the U.S.

“This merger provides the opportunity for JP Energy unitholders, customers and employees to participate in the creation of a platform of diversified assets with strong growth prospects. The exchange ratio premium and future growth prospects provide significant investment value to our unitholders,” said J. Patrick Barley, president and CEO. “Lynn’s extensive experience throughout the energy value chain as well as ArcLight’s continued support of the combined enterprise will help ensure the future success of American Midstream.”


  • The resulting benefits of the transaction are meaningful. The strategic combination is expected to have the following benefits:
  • Increase Scale and Diversification: Build a broader footprint, enhance competitive position and profitability
  • Expand Service Offering: Expand operations across natural gas, refined products, crude oil and NGLs with opportunity to capture new customers and demand
  • Accelerate Growth: Increase platform for potential third-party acquisitions due to expanded operations and scale, potential for drop downs and partnership opportunities with ArcLight, and growth capital availability
  • Add Complementary Assets: Leverage combined positions in the Permian; crude oil, liquids logistics, and terminals; in addition to approximately $10 million of run-rate synergies
  • Improve Financial Position: Substantially enhance access to sources of capital given increased scale; creates a path to pro forma liquidity over $250 million, with low pro forma leverage of 3.8x and improved ability to pursue acquisitions
  • Fuel Long-Term Distribution Growth: Establish path to mid-single digit distribution growth over the long-term

Follow this link to read the complete press release.



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