Summit Midstream Partners To Buy Summit Midstream Partners LLC

(RTTNews) - Summit Midstream Partners LP (SMLP) said that it reached a definitive agreement with Energy Capital Partners II LLC or "ECP" to acquire Summit Midstream Partners LLC or "Summit Investments", the privately held company that indirectly owns SMLP's general partner, Summit Midstream GP LLC, as well as 5.9 million SMLP common units owned separately by ECP, for $35 million in cash plus warrants covering 10 million SMLP common units.

As per the terms of the deal, at closing, ECP will loan the full $35 million of cash proceeds to SMLP under a first-lien senior secured credit agreement which will bear interest at 8.0% per annum and the principal on which will be paid at maturity on March 31, 202.

SMLP intends to utilize the proceeds of the ECP Loan to enhance its liquidity position and for general corporate purposes.

SMLP expects the transaction to close in the second quarter of 2020, subject to certain closing conditions including finalization of the terms of the ECP Loan agreement.

SMLP now expects 2020 adjusted EBITDA to trend to the low-end of our previously stated $260 million to $285 million guidance range and capital expenditures to be reduced by 33% to a new range of $30 million to $50 million.

SMLP also plans to immediately suspend its distributions payable on its common units and on its 9.50% Series A fixed-to-floating rate cumulative redeemable perpetual preferred units.

Upon closing of the transaction, all directors affiliated with ECP will resign from the Board of Directors of SMLP's General Partner. SMLP will amend its partnership agreement in connection with the transaction to provide for the public election of directors on a staggered basis beginning in 2022.