Summit Investments reviews strategic alternatives

Energy Capital Partners (ECP), the private equity firm that controls Summit Midstream Partners LLC (Summit Investments), has concluded its strategic review process regarding Summit Investments. ECP has determined that continuing its ownership and pursuing a course of action that includes, but is not limited to, continuing to offer to drop-down assets at Summit Investments to Summit Midstream Partners LP (NYSE: SMLP) is the best way to enhance the value of ECP's investment in Summit Investments and SMLP.

Summit Investments is expected to provide support to SMLP to facilitate a drop-down strategy such that SMLP will not need to issue equity to finance the purchase of drop-down assets in 2016. Summit Investments continues to evaluate specific drop-down alternatives including, among other things, materially accelerating the timing of Summit Investments' plan to execute $400 million to $800 million of drop-down transactions each year through 2017. 

Summit Investments has had preliminary discussions with the Conflicts Committee of SMLP's general partner concerning the evaluation of Summit Investments' portfolio of midstream assets in the context of a potential offer for SMLP to acquire all, or a portion of, such assets as early as the first quarter of 2016. Neither Summit Investments nor ECP has made a formal proposal to SMLP with respect to such a transaction, nor can there be any assurance that such a transaction will be proposed or consummated.

Furthermore, ECP has approved a unit purchase program at Summit Investments of up to $100 million of common units of SMLP, demonstrating ECP's continued confidence in the near-term and long-term outlook for SMLP. Unit purchases were expected to begin as early as Dec. 14. Units may be purchased under the purchase program in open market transactions, in privately negotiated transactions, or otherwise. The purchase program does not require Summit Investments to purchase a specific number of units. There can be no assurance that Summit Investments will purchase any units under the purchase program, and unit purchases, if any, made under the purchase program will not impact the total number of units outstanding. 

 

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