Eagle Rock Energy Partners Ltd Midstream Business to be acquired by Regency Energy Partners for $1.3B; RGP expects that this acquisition will be accretive to distributable cash flow per common unit on a pro forma basis
- midstream assets include approximately 8,100 miles of gathering pipeline and over 800 MMcf/d of processing plants and its cash flows are supported by large, long-term acreage dedications. The combined system is expected to provide significant synergies, increase efficiencies on Regencys current system, and enhance services for its customers.
- Regency management expects to recommend to its board of directors distribution increases that would represent a growth rate of 6-8% for full-year 2014. The recommended increases are subject to board approval based on Regencys future operating results, including the performance of the acquired business.
- Eagle Rock acquisition is expected to close in the second quarter of 2014
- xpects to finance the acquisition by issuing $200 million of Regency common units to Eagle Rock, issuing $400 million of Regency common units to Energy Transfer Equity, L.P. (NYSE: ETE); and the assumption and like-kind exchange of up to $550 million of outstanding Eagle Rock senior notes into Regency senior notes