Source: NGL Supply, Hicksgas
NGL Supply, a leading supplier of propane and other natural gas liquids, and Hicksgas, a retail supplier of residential and commercial propane, announce that they have combined their operations to create a new midstream and retail propane limited partnership. The new entity will operate under the name Silverthorne Energy Partners LP.
Under the terms of the agreement, the newly created partnership consists of substantially all the assets of Hicksgas and NGL Supply and an $11 million equity contribution by Michael Krimbill, Brad Atkinson and Jay Hatfield. Michael Krimbill, who has an extensive track record in the propane sector, will serve as chief executive officer of Silverthorne. Brad Atkinson will serve as vice president, business development. The NGL Supply and Hicksgas management teams will continue to run the day-to-day operations of their respective businesses.
Prior to the combination, NGL Supply was a portfolio company of Denham Capital Management, a leading energy-focused global private equity firm, which acquired a majority interest in the company in 2004. Hicksgas and Denham Capital will continue as significant equity holders in Silverthorne.
Silverthorne would have ranked 13th among LP Gas Magazine’s Retail Propane Top 50 list (as published in its February 2010 issue), selling approximately 53 million retail propane gallons annually and serving over 60,000 retail customers. It will own three proprietary propane terminals, two in the upper Midwest of the United States and one in Canada. For the prior 12 months, the contributed businesses of NGL Supply and Hicksgas had combined sales exceeding $750 million. Existing trade names will be utilized for both the retail propane division and the midstream terminaling and wholesale division.
“The combination of Hicksgas and NGL Supply will result in an operating platform with growth opportunities in retail propane, as well as natural gas liquids storage and distribution infrastructure,” said Michael Krimbill, CEO of Silverthorne. “Both companies have a long successful history and have done business together for over 30 years. I am confident that their combination will bring even more success. We are excited that both management teams will continue to run the day-to-day operations of their respective businesses.”
Silverthorne has enhanced the financial resources of the combined companies by obtaining a $150 million credit facility, with a four-year maturity, syndicated by a bank group led by Wells Fargo Bank, N.A., BNP Paribas and Harris N.A. Wayne Gordon of Glaucon Capital Partners acted as financial advisor and placement agent in connection with the arrangement of the credit facility. Borrowings under the facility will be used to fund the transaction, working capital requirements and future acquisitions.
“Our goal is to expand our operating footprint, and we are presently looking to acquire quality retail propane operations as well as NGL/natural gas storage, terminaling and transportation assets,” said Brad Atkinson, vice president business development