Tallgrass Energy Partners Announces Completion of the Trailblazer Acquisition & an Increased Distribution for the First Quart...
02 April 2014 - 7:15AM
Business Wire
Tallgrass Energy Partners, LP (NYSE: TEP) ("TEP” or the
“Partnership") today announced that it has closed on the
acquisition of Trailblazer Pipeline Company LLC (“Trailblazer”)
from a wholly owned subsidiary of Tallgrass Development, LP for
total consideration valued at approximately $164 million. In
addition, the Partnership declared a quarterly cash distribution to
unitholders of $0.3250 per common unit for the first quarter of
2014, or $1.30 on an annualized basis. This represents an amount
that is 13% over the minimum quarterly distribution of $0.2875 and
a 3.2% sequential increase from the fourth quarter 2013
distribution of $0.3150. “We are pleased to announce the completion
of our first dropdown transaction at TEP and the third consecutive
increase in our quarterly distribution. We expect the acquisition
of Trailblazer to be immediately accretive to our unitholders, and
as a result of this acquisition, we plan to recommend to our Board
of Directors an increase in our annualized distribution of at least
$0.20 beginning with the second quarter of 2014,” said Tallgrass’
President and CEO, David G. Dehaemers Jr.
Acquisition of
Trailblazer
The purchase price for Trailblazer was comprised of $150 million
in cash and the issuance of 385,140 common units to Tallgrass
Development, LP. Based on the Partnership’s March 31, 2014 closing
price, the common units equate to approximately $14 million. The
purchase price represents a multiple in the range of approximately
8.2 to 9.6 times Trailblazer’s estimated 2014 Adjusted EBITDA.
Trailblazer is an approximately 436-mile pipeline system that
begins along the border of Wyoming and Colorado and extends to
Beatrice, Nebraska with a maximum capacity of 862 MMcf/day, the
substantial majority of which is subscribed under firm
transportation contracts with a weighted average remaining life of
approximately 3.6 years. Trailblazer recently completed
construction of the Redtail lateral on the west-end of the system
which added 40 MMcf/day of firm transportation from a major
producer in the region for a period of 10 years. In addition,
Trailblazer recently reached a settlement agreement in its tariff
rate case, has received certification of the settlement from the
presiding administrative law judge, and is awaiting final approval
of the settlement from the Federal Energy Regulatory
Commission.
Distribution for the First Quarter of
2014
The Partnership will pay a distribution of $0.3250 per common
unit for the first quarter of 2014 on Wednesday, May 14, 2014 to
unitholders of record as of the close of business on Wednesday,
April 30, 2014.
About Tallgrass Energy Partners,
LP
Tallgrass Energy Partners, LP (NYSE: TEP) is a publicly traded,
growth-oriented limited partnership formed to own, operate, acquire
and develop midstream energy assets in North America. We currently
provide natural gas transportation and storage services for
customers in the Rocky Mountain and Midwest regions of the United
States through our Tallgrass Interstate Gas Transmission system and
provide processing services for customers in Wyoming through our
Casper and Douglas natural gas processing and West Frenchie Draw
natural gas treating facilities. We believe we are well-positioned
to capture growing natural gas volumes produced in the
Denver-Julesburg Basin and the Niobrara and Mississippi Lime shale
formations.
Forward-Looking
Statements
Disclosures in this press release contain “forward-looking
statements.” All statements, other than statements of historical
facts, included in this press release that address activities,
events or developments that management expects, believes or
anticipates will or may occur in the future are forward-looking
statements. Without limiting the generality of the foregoing,
forward-looking statements contained in this press release
specifically include the accretion expected to be realized by the
Partnership as a result of the Trailblazer acquisition, the plan to
recommend an increase in the annualized distribution of the
Partnership, and the expectations of plans, strategies, objectives
and growth and anticipated financial and operational performance of
the Partnership and its subsidiaries. Such statements are subject
to a number of assumptions, risks and uncertainties, many of which
are beyond the control of the Partnership, which may cause actual
results to differ materially from those implied or expressed by the
forward-looking statements, and other important factors that could
cause actual results to differ materially from those projected,
including those set forth in reports filed by TEP with the
Securities and Exchange Commission. Any forward-looking statement
applies only as of the date on which such statement is made and the
Partnership does not intend to correct or update any
forward-looking statement, whether as a result of new information,
future events or otherwise, except as required by law.
To learn more, please visit our website at
www.tallgrassenergy.com.
Tallgrass Energy Partners, LPInvestor RelationsNate Lien,
913-928-6012investor.relations@tallgrassenergylp.com
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