Regency Energy Partners To Acquire PVR Partners In $5.6 Bln Deal - Quick Facts

(RTTNews) - Regency Energy Partners LP (RGP) agreed to acquire PVR Partners L.P. (PVR) for about $5.6 billion, including the assumption of net debt of $1.8 billion. The acquisition will be a unit-for-unit transaction plus a one-time cash payment to PVR unitholders.

The boards of directors of both companies have unanimously approved a definitive merger agreement.

As per the terms of the agreement, holders of PVR common units, Class B Units and Special Units will receive 1.020 common units of Regency for each PVR unit held. In addition, PVR unitholders will receive a one-time cash payment at closing of the merger estimated to be approximately $40 million in the aggregate.

The consideration to be received by PVR unitholders is valued at $28.68 per common unit based on Regency's closing price as of October 9, 2013, representing a 25.7% premium to the closing price of PVR's common units of $22.81 on October 9, 2013, and a 24.8% premium to the volume weighted average closing price of PVR's common units for the last 10 trading days ending October 9, 2013.

The combination is expected to be slightly dilutive to 2014 DCF, but is not expected to affect anticipated cash distribution growth in 2014; moreover, the enhanced scale, balance sheet strength and diversification are expected to provide substantial EBITDA and DCF growth over time.

Following the closing, the name of the combined company will remain Regency with headquarters in Dallas, the companies said.

The companies noted that Michael Bradley, president and chief executive officer of Regency, will continue as president and chief executive officer and Thomas Long will continue as executive vice president and chief financial officer of the combined company.

The transaction is expected to close in the first quarter of 2014. The transaction is subject to the approval of PVR's unitholders, Hart-Scott-Rodino Antitrust Improvements Act approval and other customary closing conditions.