The two deals, which are valued at $815m including debt, are expected to create a partnership with a $3bn enterprise value.
American Midstream Partners said that the deals expand its onshore gathering, processing and transmission services in the Eagle Ford shale play and in the southeast US gas transmission market.
After the completion of the transaction, American Midstream Partners will own and operate nearly 8,000 miles of crude, natural gas and NGL pipelines.
The transaction will also include ten processing plants with over 1.0 Bcf/d of capacity and six fractionation facilities with 111,500 Bbl/d of capacity.
American Midstream president and CEO Lynn Bourdon III said: “This transaction accelerates our transformation into a fully integrated gathering, processing and transmission company focused in select core areas.
“The transaction also furthers our strategy of redeploying capital into higher growth businesses along with divesting non-core assets at attractive multiples.”
Upon completion of the deals, scheduled in next year's second quarter, American Midstream will boost its midstream infrastructure.
Southcross’ general partner president and CEO Bruce Williamson said: “Private and public equity holders from both Southcross Holdings and Southcross Energy will be able to participate in a more diverse, sustainably capitalized company with units that offer immediate cash distributions and strong coverage.”
Recently, American Midstream Partners acquired an additional 17% stake in the Destin Pipeline from affiliates of ArcLight Capital Partners for approximately $30m.
The 255-mile Destin natural gas pipeline has total capacity of 1.2 Bcf/d. It originates offshore in the Mississippi Canyon and is connected to four producing platforms.
Image: American Midstream Partners intends to expand its onshore gathering, processing and transmission services in the US. Photo: courtesy of supakitmod/ FreeDigitalPhotos.net.
