Crestwood Midstream Partners LP (CMLP) and Crestwood Holdings LLC and Inergy L.P. (NRGY) and Inergy Midstream, L.P. (NRGM) announced the signing of definitive agreements to create a fully integrated midstream partnership with a total enterprise value of approximately $7 billion. The combination will be implemented through a series of transactions, which will result in Crestwood Holdings acquiring the general partner, and thus control, of Inergy L.P. The total consideration received by the Crestwood Midstream public unitholders other than Crestwood Holdings represents a 14% premium relative to Crestwood Midstream's closing price on May 3, 2013. Crestwood's Chairman, President and Chief Executive Officer, Robert Phillips, will lead Inergy L.P. following completion of the transactions, and will serve as Chairman, President and Chief Executive Officer of the combined company.
Crestwood Midstream unitholders will receive 1.070 common units of Inergy Midstream for each unit of Crestwood Midstream they own. All Crestwood Midstream public unitholders other than Crestwood Holdings will receive a one-time cash payment at closing of the merger of approximately $35 million in the aggregate, or $1.03 per unit, $25 million of which will be payable by Inergy Midstream and approximately $10 million of which will be payable by Crestwood Holdings.
In the first transaction, which is expected to close in mid-June, Crestwood Holdings will acquire the general partner of Inergy L.P. for $80 million in cash. In the second transaction, Crestwood Holdings will contribute to Inergy L.P. 100% of its interest in Crestwood Gas Services GP LLC, the general partner of Crestwood Midstream that also owns 100% of the incentive distribution rights of Crestwood Midstream, in exchange for 35.1 million common units and 4.4 million subordinated units of Inergy L.P. In the final transaction, which is expected to close in the third calendar quarter of 2013, Crestwood Midstream will be merged into a subsidiary of Inergy Midstream.
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