Tulsa-based NGL acquires Downeast Energy
BY ROD WALTON World Staff Writer
Tuesday, April 24, 2012
4/24/12 at 3:49 AM
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NGL Energy Partners LP will make its fifth major acquisition in less than a year through its purchase of another New England propane company, the storage and distribution partnership announced Monday.
Tulsa-based NGL has signed an agreement with Downeast Energy Corp. to buy assets that will give it access to more than 50,000 customers in New England markets.
Downeast Energy has 14 offices in Maine and New Hampshire.
"They deliver approximately 12 million gallons of retail propane volume, and 28 million gallons of distillate volume annually," NGL CEO Michael Krimbill said in a statement.
NGL is paying an undisclosed amount in cash and its common units in exchange for the acquisition.
The company has bought assets from E. Osterman Propane, SemGroup Corp's SemStream division, Pacer Propane and North American Propane since holding its initial public offering in May 2011.
Downeast Energy has been owned by the Morrell family for more than 80 years, according to reports.
John Peters will remain as president of Downeast after the NGL acquisition.
"Choosing the right strategic partner enables us to continue our outstanding customer service, enhances security of supplies and provides additional opportunities for our employees," Peters said.
"We believe we have made a great decision for everyone."
NGL also announced Monday that it was increasing its credit facility by $20 million to help fund its future acquisition plans.
Total borrowing capacity was amended from $330 million to $350 million but keeping the October 2016 maturity date in effect.
The acquisition facility was increased $50 million to $250 million.
The working capital facility was downsized by $30 million.
"This latest expansion of our credit facility allows us the flexibility to pursue our growth strategy," NGL Chief Financial Officer Craig Jones said in a statement.
Not factoring in the Downeast deal, NGL Partners owns and operates 15 terminals, a wholesale distribution network and moves propane to more than 124,000 retail customers in 11 states.
Merge, sell and buy: NGL Energy Partners timeline
October 2010: Company formed from merger of Illinois-based Hicksgas and Tulsa-based NGL Supply.
May 2011: NGL Energy Partners holds initial public offering.
August 2011: Company announces purchase of E. Osterman Propane assets in Northeast.
August 2011: NGL buys SemStream propane and natural gas liquids assets from SemGroup Corp. in exchange for up to $100 million in cash, 8.9 million common units of NGL and two places on the board of directors.
December 2011: Pacer Propane assets to be purchased for $30.5 million in cash and 1.5 million units of NGL.
January: NGL acquires New England assets from North American Propane.
Monday: Downeast Energy Corp. agrees to sell propane and distillate assets in New England to NGL.
Original Print Headline: NGL Energy makes another acquisition
Rod Walton 918-581-8457
Mike Krimbill: The CEO says the latest acquisition adds 12 million gallons of retail propane volume and 28 million gallons of distillate volume annually to the storage and distribution partnership.