* Combined entity to have enterprise value of about $7 bln
* Series of transactions to be completed in third quarter
* Combined entity to focus on U.S. shale fields
May 6 Inergy LP, Inergy Midstream LP
and Crestwood Midstream Partners LP said on
Monday they have agreed to merge in a series of complex deals to
form a $7 billion entity to tap demand for pipeline and storage
services in North America's fast-developing shale fields.
Inergy shareholders will end up with larger positions in
both companies that will remain after the deals are completed,
Inergy and Inergy Midstream. However, Crestwood will buy control
of Inergy LP's general partner and its management will run the
Rapid growth in production from shale fields in the United
States has created demand for new energy infrastructure to
gather, process and ship oil, natural gas and related liquids.
The combined entity will cater to shale fields including the
Marcellus Shale, Bakken Shale, Eagle Ford Shale and the Barnett
Shale, the companies said in a statement.
Crestwood Chief Executive Robert Phillips will lead the
combined company, which will be headquartered in Houston, Texas.
Inergy Chairman John Sherman and President Brooks Sherman plan
to step down from management at the companies, but will maintain
their personal investment in the firems.
"This is an industry where size matters and we will be in
much more competitive shape pro forma than before," Phillips
said in a conference calls with investors.
"Both firms have a pretty significant backlog of organic
growth opportunities. Through the combination, we'll have an
even greater opportunity set because of the size and scale and
the reach of the organization."
The companies expect the deals, also involving affiliate
Crestwood Holdings, to be completed in the third quarter of
Inergy Midstream and Inergy LP would continue to be listed
on the New York Stock Exchange upon completion of the deal,
while Crestwood Midstream will be merged with a wholly owned
unit of Inergy Midstream, the companies said.
Crestwood Midstream's shares were up more than 4 percent at
$24.90 in middaytrading on Monday. Inergy Midstream's shares
fell 5 percent to $22.92.
Inergy LP's shares rose 9 percent to $23.97.
Citigroup Global Markets Inc acted as exclusive financial
adviser to Crestwood. Simpson Thacher & Bartlett LLP and Akin
Gump Strauss Hauer & Feld LLP acted as legal counsel.
Greenhill & Co served as lead financial adviser and
Jefferies LLC served as co-financial adviser and sole technical
advisor for Inergy L.P. and Inergy Midstream. Vinson & Elkins
LLP acted as legal counsel to Inergy L.P. and Inergy Midstream.