Martin Midstream acquires controlling stake in Cardinal Gas Storage
Martin Midstream has entered into definitive documentation with Energy Capital Partners and its affiliated funds (ECP) to acquire all of ECP's Category A membership interests (57.8%) in Cardinal Gas Storage for total consideration of $120.0 million.
Martin currently owns the remaining Category A membership interest (42.2%) in Cardinal through its wholly-owned subsidiary Redbird Gas Storage.
At closing, Redbird will own 100% of the Category A interests in Cardinal and will retire $265 million of net project level financings currently in place at various Cardinal subsidiaries.
Martin will fund the transaction using available capacity under its revolving credit facility. Additionally, Martin Resource Management Corp., the controlling indirect owner of the partnership's general partner, has committed to purchasing at least $40 million and up to $45 million of common equity units.
Closing of the transaction is expected to occur during the third quarter 2014 and is not subject to Hart-Scott-Rodino review.
"We are excited to announce the acquisition of ECP's interests in Cardinal Gas Storage," said Ruben Martin, CEO of Martin Midstream. "This acquisition will allow us to more effectively drive the strategic direction of Cardinal."
Post-closing, MMLP will receive 100% of the Cardinal cash flows as there will be no indebtedness at the Cardinal level.
The Martin partnership expects to realize approximately $40 to $45 million of EBITDA from the acquisition for the full year 2015.
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