Item 1.01 Entry into a Material Definitive Agreement
On March 17, 2019, American Midstream Partners, LP, a Delaware limited partnership (the “Partnership”), and its general partner, American Midstream GP, LLC, a Delaware limited liability company (the “Partnership GP”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Anchor Midstream Acquisition, LLC, a Delaware limited liability company (“Parent”), Anchor Midstream Merger Sub, LLC, a Delaware limited liability company (“Merger Sub”), and High Point Infrastructure Partners, LLC, a Delaware limited liability company (“HPIP”), pursuant to which Merger Sub will merge with and into the Partnership, with the Partnership surviving as a direct wholly owned subsidiary of the Partnership GP and Parent (the “Merger”).
Under the terms of the Merger Agreement, at the effective time of the Merger, each issued and outstanding Common Unit (as defined in the Partnership’s Fifth Amended and Restated Agreement of Limited Partnership, dated April 25, 2016 (as amended, the “Partnership Agreement”)) of the Partnership, other than those held by Parent and its affiliates, will be converted into the right to receive $5.25 per Common Unit in cash without any interest thereon (the “Merger Consideration”). The Incentive Distribution Rights (as defined in the Partnership Agreement) in the Partnership issued and outstanding immediately prior to the effective time of the Merger shall, as a result of the merger, automatically be canceled and cease to exist, with no consideration delivered in respect thereof. The Common Units held by Parent and its affiliates and the General Partner Interest (as defined in the Partnership Agreement) issued and outstanding immediately prior to the effective time of the Merger shall be unaffected by the Merger and shall remain outstanding. In connection with entry into the Merger Agreement and to provide financing for the Merger Consideration, ArcLight Energy Partners Fund V, L.P. (“ArcLight”), entered into a $204 million binding equity commitment letter with Parent.
The Conflicts Committee (the “Conflicts Committee”) of the Board of Directors of the Partnership GP (the “GP Board”) has (i) determined that the Merger Agreement and the consummation of the transactions contemplated thereby, including the Merger, are in the best interests of the Partnership and the Partnership’s unaffiliated unitholders, (ii) approved the Merger Agreement and the transactions contemplated thereby, including the Merger, and (iii) recommended that the GP Board approve the Merger Agreement, the consummation of the transactions contemplated thereby, including the Merger. The GP Board (acting in part based upon the recommendation of the Conflicts Committee) has (i) determined that each of the Merger, the Merger Agreement and the transactions contemplated thereby is in the best interests of the Partnership and the Partnership’s unaffiliated unitholders, (ii) approved the Merger Agreement, the execution, delivery and performance of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Merger, and (iii) directed the Merger Agreement, and the transactions contemplated thereby, including the Merger, be submitted to a vote of Limited Partners (as defined in the Partnership Agreement) pursuant to the Partnership Agreement, and authorized the approval of the Merger Agreement, and the transactions contemplated thereby, including the Merger, by the Limited Partners be taken without a meeting, without a vote and without prior notice, pursuant to and on the conditions set forth in the Partnership Agreement.
Immediately prior to the execution of the Merger Agreement, Parent, on behalf of ArcLight and its affiliates, delivered to the Partnership a written consent adopting the Merger Agreement and approving the transactions contemplated thereby, including the Merger, by a Unit Majority (as defined in the Partnership Agreement) of the Limited Partners constituting a Partnership Unitholder Approval (as defined in the Partnership Agreement).
The Merger Agreement contains customary representations and warranties from the parties, and each party has agreed to customary covenants, including, among others, covenants relating to (1) the conduct of business during the interim period between the execution of the Merger Agreement and the effective time of the Merger and (2) the obligation to use commercially reasonable efforts to cause the Merger to be consummated.
Completion of the Merger is subject to certain customary conditions, including, among others: (1) expiration or termination of applicable waiting periods, if any, under the Hart-Scott-Rodino Antitrust Improvements Act; (2) there being in effect, or sought by a governmental authority, no law or injunction prohibiting consummation of the transactions contemplated under the Merger Agreement or other legal restraint in effect; (3) subject to specified materiality standards, the accuracy of certain representations and warranties of the other party; (4) compliance by the other party in all material respects with its covenants and obligations under the Merger Agreement; (5) with respect to Parent and Merger Sub’s obligations, there not having been a Partnership Material Adverse Effect (as defined in the Merger Agreement); (6) with respect to Parent and Merger Sub’s obligations, the consent of the lenders under the Partnership’s existing credit facility to the Merger Agreement and the transactions contemplated thereby and certain other modifications to the Partnership’s existing credit facility (the “Credit Facility Modifications”); and (7) with respect to Parent and Merger Sub’s obligations, the Partnership’s delivery prior to April 30, 2019 of audited financial statements of the Partnership to the lenders under the Partnership’s existing credit facility. Additionally, in order to complete the Merger, the Partnership will file with the SEC and furnish to the Partnership’s unitholders an information statement and other relevant documents, including a Schedule13E-3. The SEC may review these documents and any review by the SEC may affect the timing of the completion of the Merger.
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