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Summit Midstream Partners Closes Acquisition of the Owner of its General Partner
Friday 29 May 2020

Texas, US-based midstream energy company Summit Midstream Partners, LP (NYSE: SMLP) has closed the acquisition from Energy Capital Partners II LLC of Summit Midstream Partners, LLC, the privately held company that indirectly owns SMLP's general partner, Summit Midstream GP, LLC, and 5.9m SMLP common units owned directly by an affiliate of ECP, for USD 35m in cash plus warrants covering up to 10m SMLP common units, the company said.

Concurrent with the closing of the GP Buy-in Transaction, ECP loaned the full USD 35m of cash proceeds to SMLP under a first-lien senior secured credit agreement, which will bear interest at 8.0% per annum and mature on March 31, 2021.

SMLP intends to utilize the proceeds of the ECP Loan to enhance its liquidity position and for general corporate purposes.

The acquisition results in a more simplified corporate structure whereby Summit Investments, and all of its subsidiaries, became wholly owned subsidiaries of SMLP, and SMLP will be governed by a board consisting of a majority of independent directors.

Summit Investments owns 100% of Summit Midstream Partners Holdings, LLC, which owns 100% of the GP; 45.3m SMLP common units; and the USD180.75 m deferred purchase price obligation receivable.

SMP Holdings will continue as the borrower under an existing USD158.2 m term loan which matures in May 2022 and is secured by approximately 34.6 m SMLP common units owned by SMP Holdings and the GP interest.

The acquired entities, including Summit Investments and SMP Holdings, are unrestricted subsidiaries under SMLP's senior notes indentures, and are not guarantors or restricted subsidiaries under SMLP's revolving credit facility.
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Date Published: 29/05/2020

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