American Midstream Partners LP (NYSE: AMID) has closed its acquisition of a minority interest in Delta House from an affiliate of ArcLight Capital Partners LLC, which controls the general partner of the Partnership. The Partnership acquired 25% of ArcLight’s 51.7% controlling interest in Delta House, a fee-based, semisubmersible floating production system and associated oil and gas export pipelines in the deepwater Gulf of Mexico.
In addition, the Partnership intends to recommend to its board of directors the resumption of annualized distribution increases of approximately 5%, beginning with the distribution for fourth-quarter 2015 payable in February 2016.
The Partnership acquired the interest in Delta House for total consideration of $162 million, which equates to an adjusted EBITDA multiple of approximately five times for the next 12 months and full-year 2016, and is immediately accretive to the Partnership’s current distribution. The acquisition was funded using a combination of net proceeds from the 7.5 million common unit offering that closed Sept. 15, and borrowings under the revolving credit facility.
On Sept. 18, the Partnership executed an amendment to its revolving credit facility to increase borrowing capacity from $500 million to $750 million, with the option to further increase borrowing capacity to $900 million. The Partnership expects to use the credit facility to fund growth and for other Partnership purposes. The syndicate of 17 banks is led by Bank of America NA, as administrative agent, collateral agent, L/C issuer and lender. Natixis Bank, BNP, and NBH Capital Finance joined the credit facility as new lenders.