Updated: August 22, 2023
Energy Transfer to Acquire Crestwood in a $7.1 Billion All-Equity Transaction
Unit-for-unit, credit neutral bolt-on acquisition
Expected to be immediately accretive to DCF per unit upon closing
Extends Energy Transfer’s position in the value chain deeper into the Williston and Delaware
basins Provides entry into the Powder River basin
Commercial synergy opportunities from the combination of Crestwood’s Storage and Logistics business
and Energy Transfer’s NGL & Refined Products and Crude Oil assets
Provides Crestwood unitholders with enhanced distribution and significant long-term value
appreciation opportunities
DALLAS & HOUSTON--(BUSINESS WIRE)--Aug. 16, 2023-- Energy Transfer LP (NYSE: ET) (“Energy
Transfer”) and Crestwood Equity Partners LP (NYSE: CEQP) (“Crestwood”) announced today that the
parties have entered into a definitive merger agreement pursuant to which Energy Transfer will
acquire Crestwood in an all-equity transaction valued at approximately $7.1 billion, including the
assumption of $3.3 billion of debt, based on the closing price on August 15, 2023.
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Under the terms of the agreement, Crestwood common unitholders will receive 2.07 Energy Transfer
common units for each Crestwood common unit. The transaction is expected to close in the fourth
quarter of 2023, subject to the approval of Crestwood’s unitholders, regulatory approvals, and
other customary closing conditions. Upon closing, Crestwood common unitholders are expected to own
approximately 6.5% of Energy Transfer’s outstanding common units.
Complementary Assets
Crestwood’s system includes gathering and processing assets located in the Williston, Delaware and
Powder River basins, including approximately
2.0 billion cubic feet per day of gas gathering capacity, 1.4 billion cubic feet per day of gas
processing capacity and 340 thousand barrels per day of crude gathering capacity. If consummated,
this transaction would extend Energy Transfer’s position in the value chain deeper into the
Williston and Delaware basins while also providing entry into the Powder River basin. These assets
are expected to complement Energy Transfer’s downstream fractionation capacity at Mont Belvieu, as
well as its hydrocarbon export capabilities from both its Nederland Terminal in Texas and the
Marcus Hook Terminal in Philadelphia, Pennsylvania.
This transaction is also expected to provide benefits to Energy Transfer’s NGL & Refined Products
and Crude Oil businesses with the addition of strategically located storage and terminal assets,
including approximately 10 million barrels of storage capacity, as well as trucking and rail
terminals. These systems are anchored by predominantly investment-grade producer customers with
firm, long-term contracts, and significant acreage dedications.
Positive Financial Impact
The transaction is expected to be immediately accretive to distributable cash flow per unit as well
as neutral to Energy Transfer’s leverage metrics upon closing. Similar to Energy Transfer,
Crestwood’s cash flows are supported by primarily fee-based revenues from long-term contracts with
investment-grade counterparties. In addition, with the increased scale and strengthened balance
sheet, Energy Transfer expects to be able to improve on the current cost of financing for the
acquired debt securities. Structured as a 100% unit-for-unit exchange, the transaction is
tax-efficient to Crestwood unitholders and is anticipated to position both partnerships for
long-term value upside through the combination.
Energy Transfer also expects to achieve at least $40 million of annual run-rate cost synergies
before additional benefits of financial and commercial opportunities.
Compelling Value Creation for Crestwood Unitholders
Energy Transfer’s premier business model, strong balance sheet and backlog of growth opportunities
supports the potential for significant additional value creation over time. The tax-efficient
transaction is expected to provide Crestwood unitholders a benefit to distributions per unit and an
opportunity to participate in Energy Transfer’s targeted annual distribution per unit growth rate
of 3-5%.
Advisors
BofA Securities acted as sole financial advisor to Energy Transfer and Kirkland & Ellis LLP acted
as legal counsel. Intrepid Partners, LLC and Evercore acted as financial advisors to Crestwood and
Vinson & Elkins LLP acted as legal counsel.
Crestwood Investor Call
Crestwood management will host a conference call for investors and analysts of Crestwood today at
9:00 a.m. Eastern Time (8:00 a.m. Central Time), which will be broadcast live over the Internet.
Investors will be able to access the webcast via the “Investors” page of Crestwood’s website at
www.crestwoodlp.com. Please log in at least ten minutes in advance to register and download any
necessary software. A replay will be available shortly after the call for 90 days.
Additional Information
Slide presentations with additional information are accessible via the Energy Transfer and
Crestwood websites at www.energytransfer.com and www.crestwoodlp.com.
About Energy Transfer
Energy Transfer LP (NYSE: ET) owns and operates one of the largest and most diversified portfolios
of energy assets in the United States, with nearly 125,000 miles of pipeline and associated energy
infrastructure. Energy Transfer’s strategic network spans 41 states with assets in all of the major
U.S. production basins. Energy Transfer is a publicly traded limited partnership with core
operations that include complementary natural gas midstream, intrastate and interstate
transportation and storage assets; crude oil, natural gas liquids (“NGL”) and refined product
transportation and terminalling assets; and NGL fractionation. Energy Transfer also owns Lake
Charles LNG Company, as well as the general partner interests, the incentive distribution rights
and approximately 34% of the outstanding common units of Sunoco LP (NYSE: SUN), and the general
partner interests and approximately 47% of the outstanding common units of USA Compression
Partners, LP (NYSE: USAC). For more information, visit the Energy Transfer LP website at
www.energytransfer.com.
About Crestwood Equity Partners LP
Houston, Texas, based Crestwood Equity Partners LP (NYSE: CEQP) is a master limited partnership
that owns and operates midstream businesses in multiple shale resource plays across the United
States. Crestwood is engaged in the gathering, processing, treating, compression and transportation
of natural gas; storage, transportation, terminalling, and marketing of NGLs; gathering, storage,
terminalling and marketing of crude oil; and gathering and disposal of produced water. For more
information, visit Crestwood Equity Partners LP at www.crestwoodlp.com; and to learn more about
Crestwood’s sustainability efforts, please visit https://esg.crestwoodlp.com.
Important Information about the Transaction and Where to Find It
In connection with the proposed transaction between Energy Transfer and Crestwood, Energy Transfer
and Crestwood will file relevant materials with the Securities and Exchange Commission (the “SEC”),
including a registration statement on Form S-4 filed by Energy Transfer that will include a proxy
statement of Crestwood that also constitutes a prospectus of Energy Transfer. A definitive proxy
statement/prospectus will be mailed to unitholders of Crestwood. This communication is not a
substitute for the registration statement, proxy statement or prospectus or any other document that
Energy Transfer or Crestwood (as applicable) may file with the SEC in connection with the proposed
transaction. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS OF
Energy Transfer AND CRESTWOOD ARE URGED TO READ THE REGISTRATION STATEMENT, THE PROXY
STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC,
AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY WHEN
THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders may obtain free copies of
the registration statement and the proxy statement/prospectus (when they become available), as well
as other filings containing important information about Energy Transfer or Crestwood, without
charge at the SEC’s website, at http://www.sec.gov. Copies of the documents filed with the SEC by
Energy Transfer will be available free of charge on Energy Transfer’s website at
www.energytransfer.com under the tab “Investor Relations” and then under the tab “SEC Filings” or
by directing a request to Investor Relations, Energy Transfer LP, 8111 Westchester Drive, Suite
600, Dallas, TX 75225, Tel. No. (214)
981-0795 or to investorrelations@energytransfer.com. Copies of the documents filed with the SEC by
Crestwood will be available free of charge on Crestwood’s website at www.crestwoodlp.com under the
tab “Investors” and then under the tab “SEC Filings” or by directing a request to Investor
Relations, Crestwood Equity Partners LP, 811 Main Street, Suite 3400, Houston, TX 77002, Tel. No.
(832) 519-2200 or to investorrelations@crestwoodlp.com. The information included on, or accessible
through, Energy Transfer’s or Crestwood’s website is not incorporated by reference into this
communication.
Participants in the Solicitation
Energy Transfer, Crestwood and the directors and certain executive officers of their respective
general partners may be deemed to be participants in the solicitation of proxies in respect of the
proposed transaction. Information about the directors and executive officers of Crestwood’s general
partner is set forth in its proxy statement for its 2023 annual meeting of unitholders, which was
filed with the SEC on March 31, 2023, and in its Annual Report on Form 10-K for the year ended
December 31, 2022, which was filed with the SEC on February 27, 2023. Information about the
directors and executive officers of Energy Transfer’s general partner is set forth in its Annual
Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on February
17, 2023. Additional information regarding the participants in the proxy solicitation and a
description of their direct or indirect interests, by security holdings or otherwise, will be
contained in the proxy statement/prospectus and other relevant materials filed with the SEC when
they become available.
No Offer or Solicitation
This communication is for informational purposes only and is not intended to, and shall not,
constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation
of any vote or approval, nor shall there be any offer, issuance, exchange, transfer, solicitation
or sale of securities in any jurisdiction in which such offer, issuance, exchange, transfer,
solicitation or sale would be in contravention of applicable law. No offering of securities shall
be made except by means of a prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended (the “Securities Act”).
Forward-Looking Statements
This communication contains “forward-looking statements” within the meaning of the federal
securities laws, including Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act of 1934, as amended. In this context, forward-looking statements often address future
business and financial events, conditions, expectations, plans or ambitions, and often include, but
are not limited to, words such as “believe,” “expect,” “may,” “will,” “should,” “could,” “would,”
“anticipate,” “estimate,” “intend,” “plan,” “seek,” “see,” “target” or similar expressions, or
variations or negatives of
these words, but not all forward-looking statements include such words. Forward-looking statements
by their nature address matters that are, to different degrees, uncertain, such as statements about
the consummation of the proposed transaction and the anticipated benefits thereof. All such
forward-looking statements are based upon current plans, estimates, expectations and ambitions that
are subject to risks, uncertainties and assumptions, many of which are beyond the control of Energy
Transfer and Crestwood, that could cause actual results to differ materially from those expressed
in such forward-looking statements. Important risk factors that may cause such a difference
include, but are not limited to: the completion of the proposed transaction on anticipated terms
and timing, or at all, including obtaining regulatory approvals that may be required on anticipated
terms
and Crestwood unitholder approval; anticipated tax treatment, unforeseen liabilities, future
capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness,
financial condition, losses, future prospects, business and management strategies for the
management, expansion and growth of the combined company’s operations and other conditions to the
completion of the merger, including the possibility that any of the anticipated benefits of the
proposed transaction will not be realized or will not be realized within the expected time period;
the ability of Energy Transfer and Crestwood to integrate the business successfully and to achieve
anticipated synergies and value creation; potential litigation relating to the proposed transaction
that could be instituted against Energy Transfer, Crestwood or the directors of their respective
general partners; the risk that disruptions from the proposed transaction will harm Energy
Transfer’s or Crestwood’s business, including current plans and operations and that management’s
time and attention will be diverted on transaction-related issues; potential adverse reactions or
changes to business relationships, including with employees suppliers, customers, competitors or
credit rating agencies, resulting from the announcement or completion of the proposed transaction;
rating agency actions and Energy Transfer and Crestwood’s ability to access short- and long-term
debt markets on a timely and affordable basis; legislative, regulatory and economic developments,
changes in local, national, or international laws, regulations, and policies affecting Energy
Transfer and Crestwood; potential business uncertainty, including the outcome of commercial
negotiations and changes to existing business relationships during the pendency of the proposed
transaction that could affect Energy Transfer’s and/or Crestwood’s financial performance and
operating results; certain restrictions during the pendency of the merger that may impact
Crestwood’s ability to pursue certain business opportunities or strategic transactions or otherwise
operate its business; acts of terrorism or outbreak of war, hostilities, civil unrest, attacks
against Energy Transfer or Crestwood, and other political or security disturbances; dilution caused
by Energy Transfer’s issuance of additional units representing limited partner interests in
connection with the proposed transaction; the possibility that the transaction may be more
expensive to complete than anticipated, including as a result of unexpected factors or events; the
impacts of pandemics or other public health crises, including the effects of government responses
on people and economies; changes in the supply, demand or price of oil, natural gas, and natural
gas liquids; those risks described in Item 1A of Energy Transfer’s Annual Report on Form 10-K,
filed with the SEC on February 17, 2023, and its subsequent Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K; those risks described in Item 1A of Crestwood’s Annual Report on Form
10-K, filed with the SEC on February 27, 2023, and its subsequent Quarterly Reports on Form 10-Q
and Current Reports on Form 8-K; and those risks that will be more fully described in the
registration statement on Form S-4 and accompanying proxy statement/prospectus that will be filed
with the SEC in connection with the proposed transaction.
While the list of factors presented here is, and the list of factors to be presented in the
registration statement and the proxy statement/prospectus will be, considered representative, no
such list should be considered to be a complete statement of all potential risks and uncertainties.
Unlisted factors may present significant additional obstacles to the realization of forward-looking
statements. Energy Transfer and Crestwood caution you not to place undue reliance on any of these
forward-looking statements as they are not guarantees of future performance or outcomes and that
actual performance and outcomes, including, without limitation, our actual results of operations,
financial condition and liquidity, and the development of new markets or market segments in which
we operate, may differ materially from those made in or suggested by the forward-looking statements
contained in this communication. Neither Energy Transfer nor Crestwood assumes any obligation to
publicly provide revisions or updates to any forward-looking statements, whether as a result of new
information, future developments or otherwise, should circumstances change, except as otherwise
required by securities and other applicable laws. Neither future distribution of this communication
nor the continued availability of this communication in archive form on Energy Transfer’s or
Crestwood’s website should be deemed to constitute an update or re-affirmation of these statements
as of any future
date.
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Energy Transfer
Investor Relations:
Bill Baerg, Brent Ratliff, Lyndsay Hannah, 214-981-0795
Media Relations: Media@energytransfer.com 214-840-5820
Crestwood Equity Partners LP
Investor Contact
Andrew Thorington, 713-380-3028 andrew.thorington@crestwoodlp.com
Vice President, Finance and Investor Relations
Media Contact
Joanne Howard, 832-519-2211 joanne.howard@crestwoodlp.com
Senior Vice President, Sustainability and Corporate Communications
Source: Energy Transfer LP and Crestwood Equity Partners LP