February 10, 2015 [OPIS] - NGL Energy Partners said on Monday that it will buy Magnum NGLs from Magnum Development LLC, a portfolio company of Haddington Ventures LLC, and other Haddington-sponsored investment entities.
Magnum owns and operates a natural gas liquids storage facility with multiple existing salt caverns and a potential capacity of greater than 10 million bbl.
The facility is located southwest of Salt Lake City, Utah, with rail and truck access to Western U.S. markets.
The definitive agreement contemplates the purchase of Magnum NGLs LLC on a debt-free basis for a purchase price of $280 million plus working capital adjustments at closing.
The transaction is fully financed and will be paid through a combination of $80 million cash and $200 million in NGL Common Units issued to the seller and subject to certain lock-up provisions.
The transaction is expected to be DCF neutral in the first year and significantly accretive to NGL’s DCF/LP unit thereafter, with an EBITDA multiple expected to be 7.1x in fiscal 2017.
The acquisition is expected to close in the first quarter of 2015.
