* 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 (Reuters) - 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 company.
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 2013.
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.