Inergy, L.P. (Nasdaq:NRGY) announced today that its wholly-owned
subsidiary, Inergy Propane, LLC (the “Company”) has purchased all
of the partnership interests in Liberty Propane, L.P. (“Liberty”)
for approximately $223 million, including an estimated assumed tax
liability.
Also, in a separate transaction, the Company signed a definitive
agreement to acquire the propane assets of MGS Corporation (“MGS”),
based in New Jersey. The MGS acquisition is subject to certain
closing conditions and Inergy anticipates closing the transaction
by mid-January.
With these acquisitions, Inergy will become the 4th largest
retail propane operator in the United States, serving nearly
800,000 customers in 32 states. Inergy plans to hold a management
conference call and webcast in mid-January to discuss these
transactions and its business outlook for fiscal 2010 and beyond.
The dial in number and webcast information will be provided in
advance of the conference call and webcast. Both transactions are
expected to be immediately accretive to Inergy unitholders on a
distributable cash flow per unit basis.
“We are excited to bring together Inergy and these two
high-quality propane businesses,” said John Sherman, President and
CEO of Inergy. “These transactions represent an attractive
strategic opportunity for Inergy. We are greatly expanding our
presence in our core Northeast and Mid-Atlantic market areas, as
well as establishing a quality new footprint in the attractive
western U.S. propane market. These additions enhance Inergy’s
operating platform and further positions us to deliver long-term
growth in cash earnings to our unitholders.”
Liberty is currently the 9th largest propane retailer in the
United States with approximately 300 employees serving nearly
100,000 customers from 38 customer service centers in the
Northeast, Mid-Atlantic, and Western United States. Liberty was
formed in July 2003 by Sterling Partners and management. “Much of
what has made Liberty Propane a successful propane company is the
employees’ commitment to customers and their entrepreneurial
spirit. We are extremely excited about welcoming this high-quality,
dedicated workforce to the Inergy team,” said Sherman.
“Inergy is an outstanding company for which I have great
respect. I’ve known their senior management team for a number of
years,” said Kent Misemer, President and CEO of Liberty. “Inergy is
a demonstrated leader in the propane sector, and I believe they are
the absolute best fit for Liberty’s customers and employees.”
MGS, headquartered in Hackensack, NJ, delivers propane to
approximately 6,000 customers in New Jersey, New York,
Pennsylvania, and Delaware from 5 customer service centers and
ranks among the top 30 retail propane companies in the United
States.
The transactions represent Inergy’s 85th and 86th acquisitions
since its founding in 1996, and Inergy intends to operate the
assets under existing trade names. Inergy intends to permanently
finance the transactions with a combination of equity and debt in
line with its long-term capital structure objectives.
About Inergy, L.P. and Inergy Holdings, L.P.
Inergy, L.P., with headquarters in Kansas City, MO, is among the
fastest growing master limited partnerships in the country.
Inergy’s operations include the retail marketing, sale, and
distribution of propane to residential, commercial, industrial, and
agricultural customers. Today, Inergy serves approximately 800,000
retail customers from over 300 customer service centers throughout
the United States. Inergy also operates a natural gas storage
business; a supply logistics, transportation, and wholesale
marketing business that serves independent dealers and multi-state
marketers in the United States and Canada; and a solution-mining
and salt production company.
Inergy Holdings, L.P.’s assets consist of its ownership interest
in Inergy, L.P., including limited partnership interests, ownership
of the general partners, and the incentive distribution rights.
About Sterling Partners
Sterling Partners is a leading private equity firm with over 25
years of experience partnering with entrepreneurs to build
market-leading businesses and generate superior returns. With
approximately $4 billion of assets under management, Sterling
invests growth capital in industries with positive, long-term
trends and provides ongoing support to management through a
dedicated team of industry veterans, operators, strategy experts
and human capital professionals. Sterling Partners is a leader in
business services, education and healthcare and is co-headquartered
in Chicago and Baltimore, with additional offices in Mexico City
and Delhi. For more information, please visit
www.sterlingpartners.com.
This news release contains forward-looking statements, which are
statements that are not historical in nature such as the
expectation that the acquisitions will be immediately accretive on
a distributable cash flow per unit basis and that the MGS
acquisition is expected to close in mid-January. Forward-looking
statements are subject to certain risks, uncertainties, and
assumptions. Should one or more of these risks or uncertainties
materialize, or any underlying assumption proves incorrect, actual
results may vary materially from those anticipated, estimated, or
projected. Among the key factors that could cause actual results to
differ materially from those referred to in the forward-looking
statements are: weather conditions that vary significantly from
historically normal conditions, the demand for high deliverability
natural gas storage capacity in the Northeast, the general level of
petroleum product demand and the availability of supplies, our
ability to successfully implement our midstream business plan,
whether necessary regulatory approvals will be obtained, our
ability to generate available cash for distribution to unitholders,
and the costs and effects of legal and administrative proceedings
against us or which may be brought against us. These and other
risks and assumptions are described in Inergy’s annual report on
Form 10-K and other reports that are available from the United
States Securities and Exchange Commission.
Corporate news, unit prices, and
additional information about Inergy, including reports from the
United States Securities and Exchange Commission, are available on
the Company’s web site, www.InergyLP.com. For more information,
contact Mike Campbell in Inergy’s Investor Relations Department at
816-842-8181 or via e-mail at
investorrelations@inergyservices.com.
Inergy Holdings, L.P. (MM) (NASDAQ:NRGP)
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