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LONDON, UK / ACCESSWIRE / November 2, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Crestwood Equity Partners L.P. (NYSE: CEQP), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/'symbol=CEQP. The Company announced on October 31, 2017, the divesture of 100% stake in US Salt, LLC to an affiliate of Kissner Group Holdings L.P. The transaction is valued approximately $225 million and is subject to adjustments at closing. The announcement was made while sharing the Company's financial performance for Q3 2017. For immediate access to our complimentary reports, including today's coverage, register for free now at:
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The deal is expected to close in Q4 2017 and is subject to regulatory approvals and other closing conditions including the approval under the Hart-Scott-Rodino Act.
Key highlights of Q3 2017 results for Crestwood
The Company's key financials for Q3 2017 ending on September 30, 2017 are:
- Net Loss of $27.9 million;
- Adjusted EBITDA of $96.3 million;
- Distributable cash flow of $50.3 million;
- Cash dividend announced for Q3 2017 of $0.60 per common unit, or $2.40 per common unit, on an annualized basis. The dividend would be paid on November 14, 2017, to unit-holders of record as of November 07, 2017.
Details of the transaction
Once the deal is completed US Salt will become a subsidiary of Kissner and continue to operate under its existing name. The acquisition will allow Kissner to expand its customer base across different end-user markets
Crestwood sold off US Salt as it was a non-core business and plans to use the funds raised from the sale to pay off its debts and reinvest in its growth projects in the Bakken and Delaware Basin. The deal allows Crestwood to have adequate liquidity that it need not access equity markets to raise capital for its projects in FY17 and 2018. Crestwood expects that the transaction would be accretive to its EPS by approximately 3% to 5% from the fiscal year 2019. Crestwood has also indicated that the transaction could be taxable to its unitholders.
Commenting on the divesture, Robert G. Phillips, Chairman, President, and CEO of Crestwood's General Partner, said:
"Today we announced an agreement to divest US Salt, a non-core business in Crestwood's portfolio, for $225 million. The sales price is materially accretive to Crestwood's current business plan as we expect to reinvest the proceeds into our high-growth core Bakken and Delaware Basin footprints over the remainder of 2017 and full year 2018."
Mark Demetree, Executive Chairman and CEO of Kissner Group Holdings L.P., added:
"US Salt, with its leading position in providing evaporated salt to the consumer food, food processing, water conditioning, pharmaceutical, industrial and agricultural end-use markets, diversifies our product offering while expanding our ability to meet the needs of our customers. With US Salt, we will have increased financial scale and flexibility with non-weather correlated and non-seasonal cash flow to supplement our existing de-icing business."
About US Salt, LLC
Watkins Glen, New York-based US Salt was founded in 1893 and is a solution salt mine. It utilizes solution mining to create salt brine from underground deposits lying 2,000 to 2,800 feet beneath the surface. The brine is mechanically evaporated to create evaporated salt, which is nearly 100 percent pure sodium chloride. The Company has the production capacity of producing over 400,000 tons of evaporated salt every year. US Salt is a part of Crestwood's Marketing, Supply and Logistics segment. US salt has been catering to needs of customers in the consumer food, food processing, water conditioning, pharmaceutical, industrial and agricultural industries.
About Crestwood Equity Partners L.P.
Houston, Texas, based Crestwood is a master limited partnership that owns and operates midstream assets located primarily in the Marcellus Shale, Bakken Shale, Delaware Permian Basin, PRB Niobrara Shale, Barnett Shale and Fayetteville Shale. The business is divided into three segments - Gathering & Processing, Storage & Transportation and Marketing, Supply & Logistics. Crestwood is engaged in the gathering, processing, treating, compression, storage, and transportation of natural gas, storage, transportation, terminalling and marketing of NGLs and gathering, storage, transportation, terminalling and marketing of crude oil.
About Kissner Group Holdings L.P.
Kissner Group is the parent Company of Kissner and is owned by Metalmark Capital Holdings LLC a private equity firm, and Silvertree-KMC II LP, a venture between Silverhawk Capital Partners and Demetree Salt, LLC, and the Kissner management team.
About Kissner
Overland Park, Kansas based Kissner is a leading bulk salt and specialty packaged salt producer. Kissner owns and operates two rock salt mines - Detroit, Michigan and Lyons, Kansas. Its main business comes from governmental and commercial customers in the Great Lakes, Great Plains, and Midwest regions.
Last Close Stock Review
On Wednesday, November 01, 2017, the stock closed the trading session at $25.20, marginally up 0.80% from its previous closing price of $25.00. A total volume of 252.23 thousand shares have exchanged hands, which was higher than the 3-month average volume of 191.16 thousand shares. Crestwood Equity Partners' stock price surged 2.02% in the last one month, 4.56% in the past six months, and 26.00% in the previous twelve months. The stock has a dividend yield of 9.52% and currently has a market cap of $1.73 billion.
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