USA Compression Partners To Buy Compression Business From ETP - Quick Facts

(RTTNews) - USA Compression Partners, LP (USAC), Energy Transfer Partners, L.P. (ETP) and Energy Transfer Equity, L.P. (ETE) announced a transaction valued at approximately $1.8 billion, providing for the contribution of ETP's subsidiaries, CDM Resource Management LLC and CDM Environmental & Technical Services LLC, to USAC. ETP will contribute the CDM business in exchange for $1.225 billion in cash, approximately 19.2 million USAC common units and approximately 6.4 million USAC Class B units. The deal also includes the cancellation of the incentive distribution rights in USAC and conversion of the general partner interest in USAC into a non-economic general partner interest.

Energy Transfer Equity will acquire the ownership interests in the general partner of USAC and approximately 12.5 million USAC common units from USA Compression Holdings. ETE will acquire all of the equity interests in USAC's general partner, USA Compression Partners GP, LLC and approximately 12.5 million USAC common units from USA Compression Holdings in exchange for $250 million in cash.

The transaction is expected to be accretive to USAC's distributable cash flow in 2018. The deal is expected to strengthen ETP's balance sheet by allowing ETP to use the approximately $1.225 billion in cash proceeds that it will receive in connection with the transactions to reduce leverage.