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    American Midstream acquires offshore oil gathering assets from DCP

    American Midstream Partners LP

    American Midstream Partners LP (NYSE: AMID) has completed its acquisition of entities holding offshore oil gathering assets from an affiliate of DCP Midstream LLC.

    On July 14, the Partnership announced the execution of a purchase and sale agreement (PSA) for the acquisition from DCP of entities holding onshore natural gas processing and offshore natural gas gathering and transportation and oil gathering assets for consideration of $115 million. The assets to be acquired included the Mobile Bay gas processing plant, the Dauphin Island gathering and transmission system (DIGP), and DCP’s interest in the Main Pass Oil Gathering System (MPOG).

    Subsequent to execution of the PSA, DCP notified the Partnership that a material customer would be moving its production from DIGP and Mobile Bay. The loss of such customer’s production constituted a Material Adverse Effect (as defined in the PSA) with respect to such entities. As a result, on Aug. 11, the PSA was amended to exclude the Mobile Bay and DIGP assets and to include only the acquisition of DCP’s interest in MPOG. In addition, the purchase price was amended to $13.5 million. The acquisition closed on Aug. 11, and was funded through borrowings on the Partnership’s revolving credit facility.

    Total consideration for the MPOG assets equates to an adjusted EBITDA multiple of approximately 5.0x to 6.0x for the next 12 months and full-year 2015.

     

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