SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
December 19, 2001
Date of Report (Date of earliest event reported)
INERGY, L.P.
(Exact name of Registrant as specified in its charter)
Delaware 0-32453 43-1918951
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
1101 Walnut, Suite 1500
Kansas City, MO 64106
(Address of principal executive offices)
(816) 842-8181
(Registrant's telephone number, including area code)
Item 2. Acquisition or Disposition of Assets
On December 20, 2001, Inergy, L.P., through an affiliate as further
described below, acquired the assets of Independent Propane Company Holdings,
Inc ("IPC"). The purchase price approximated $95.1 million, including
approximately $7.5 million of working capital.
IPC Overview
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IPC's principal business is the retail sale of propane, propane
appliances and merchandise, parts and labor throughout its branch network in
Texas, Oklahoma, Arkansas, Tennessee, South Carolina, Georgia, and Florida.
During the twelve months ended September 30, 2001, IPC sold approximately 49.8
million retail gallons of propane to approximately 116,000 customers through its
44 branches and 24 satellite locations.
IPC is predominantly a distributor to the residential markets with 74%
of the volume sold to individual homeowners, 20% to commercial accounts and 6%
agricultural customers. Approximately 70% of the volumes are sold in Texas,
primarily through its locations in the Houston, Dallas and Austin regions. IPC
owns approximately 46% of the tanks it services.
IPC was founded through the merger of Beck & Root Fuel Company and
Independent Gas Company Holdings, Inc. in 1994. Since January 1, 1995 and
through September 30, 2001, IPC acquired 66 companies through stock and asset
purchase transactions. IPC has 376 employees and is headquartered in Irving,
Texas.
Transactions Related to the IPC Acquisition
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In connection with the IPC acquisition, Inergy, L.P. and several of its
affiliates entered into various transactions. IPCH Acquisition Corp., an
affiliate of Inergy L.P.'s managing general partner that ultimately became the
sole stockholder of IPC, borrowed approximately $27,000,000 from financial
institution lenders. A portion of these loan proceeds were applied to acquire
365,019 common units from Inergy, L.P. The aggregate purchase price paid for
these common units was approximately $9,600,000. IPCH Acquisition Corp utilized
these common units to provide a portion of the merger consideration distributed
to certain former stockholders of IPC's parent corporation. The balance of the
loan proceeds - amounting to $17,400,000 -- were paid as additional purchase
price consideration.
Immediately following the IPC acquisition, IPCH Acquisition Corp. sold,
assigned and transferred to our operating company the operating assets of IPC
and certain rights under the IPC acquisition agreement and related escrow
agreement. In consideration for the above sale, assignment and transfer, Inergy,
L.P. issued to IPCH Acquisition Corp. 394,601 common units, paid $82.2 million
in cash (including $9.6 million of cash received from the sale of 365,019 common
units to IPCH Acquisition Corp.) and our operating company assumed $2.5 million
of notes payable. Inergy, L.P. agreed that if it proposes to register any of its
common units under applicable securities laws,
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IPCH Acquisition Corp. will have the right to include in such registration the
394,601 common units acquired by it, subject to various conditions and
limitations specified in a Registration Rights Agreement entered into by IPCH
Acquisition Corp. and Inergy, L.P. The common units were issued in reliance upon
the exemption from registration afforded by Rule 506 of Regulation D.
Our operating company agreed that IPCH Acquisition Corp. may obtain
loans from financial institution lenders during the five year period following
the date of the Independent Propane acquisition for certain specified purposes.
If IPCH Acquisition Corp. obtains any such loans, our operating company agreed
to reimburse IPCH Acquisition Corp. for all out-of-pocket costs and expenses
incurred to obtain $5,000,000 of such borrowings, excluding interest.
IPCH Acquisition Corp. has the right to appoint two directors to the
board of directors of our managing general partner for a period of three years
immediately following the date of the IPC acquisition.
IPCH Acquisition Corp. agreed to guarantee the payment when due of the
obligations of our operating company with respect to the loan of up to
$35,000,000.
An independent committee of the Board of Directors reviewed the
transactions described above on behalf of the unitholders who are not affiliated
with our managing general partner.
Inergy Partners, LLC contributed $203,857 in cash to Inergy, L.P. in
conjunction with the IPC acquisition in order to maintain its 2% non-managing
general partner interest.
Inergy, L.P. agreed that on or before August 1, 2002, it would use its
best efforts to file a shelf registration statement under federal securities
laws and to register approximately 349,914 common units issued to former IPC
shareholders, including J.P. Morgan Partners (SBIC) LLC, subject to various
conditions and limitations specified in a Registration Rights Agreement entered
into by Inergy, L.P. and the former IPC shareholders. In addition, Inergy, L.P.
also agreed that if it proposes to register any of its common units under
applicable securities laws, these former IPC shareholders will have the right to
include their common units in such registration, subject to various conditions
and limitations specified in the Registration Rights Agreement.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements
It is impracticable to provide Independent Propane Company
Holdings' historical financial statements as of September 30,
2001 and 2000 and for the years ended September 30, 2001, 2000
and 1999 as required by this Item within the time this Current
Report on Form 8-K is required to be filed. Such historical
financial statements will be filed as soon as practicable, but
not more than 60 days after this Current Report on Form 8-K is
required to be filed.
(b) Pro forma financial information.
It is impracticable to provide the pro forma financial
statements required by this Item within the time this Current
Report on Form 8-K is required to be filed. Such pro forma
financial statements will be filed as soon as practicable, but
not more than 60 days after this Current Report on Form 8-K is
required to be filed.
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(c) Exhibits.
2.1 Agreement and Plan of Merger, dated as of December 19, 2001
by and among Inergy Holdings, LLC, IPCH Acquisition Corp., IPCH Merger Corp.,
Inergy, L.P, Independent Propane Company Holdings, certain holders of Series E
Preferred Stock of Independent Propane Company Holdings and joined in by David
L. Scott ("Scott"), Robert R. Galvin ("Galvin") and Inergy Propane, LLC.
2.2 Transaction Agreement dated as of December 19, 2001, by and
among Inergy, L. P., Inergy GP, LLC, Inergy Propane, LLC, Inergy Sales and
Service, Inc., Inergy Holdings, LLC, IPCH Acquisition Corp., and IPCH Merger
Corp.
4.1 Registration Rights Agreement entered into as of the 19/th/
day of December, 2001, by and among Inergy, L.P. and certain investors.
4.2 Registration Rights Agreement entered into as of the 19/th/
day of December, 2001, by and between Inergy, L.P. and IPCH Acquisition Corp.
99.1 Press Release dated December 19, 2001
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Inergy, L.P.
Date: January 4, 2002
By: /s/ R. Brooks Sherman
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Name: R. Brooks Sherman
Title: Chief Financial Officer
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Exhibit Index
Exhibit Number Description
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2.1 Agreement and Plan of Merger, dated as of December 19, 2001
by and among Inergy Holdings, LLC, IPCH Acquisition Corp.,
IPCH Merger Corp., Inergy, L.P, Independent Propane Company
Holdings, certain holders of Series E Preferred Stock of
Independent Propane Company Holdings and joined in by David
L. Scott ("Scott"), Robert R. Galvin ("Galvin") and Inergy
Propane, LLC.
2.2 Transaction Agreement dated as of December 19, 2001, by and
among Inergy, L. P., Inergy GP, LLC, Inergy Propane, LLC,
Inergy Sales and Service, Inc., Inergy Holdings, LLC, IPCH
Acquisition Corp., and IPCH Merger Corp.
4.1 Registration Rights Agreement entered into as of the 19/th/
day of December, 2001, by and among Inergy, L.P. and certain
investors.
4.2 Registration Rights Agreement entered into as of the 19/th/
day of December, 2001, by and between Inergy, L.P. and IPCH
Acquisition Corp.
99.1 Press Release dated December 19, 2001
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