HOUSTON--(BUSINESS WIRE)--Oct. 5, 2009--
Exterran Holdings, Inc. (NYSE: EXH) and Exterran Partners, L.P. (NASDAQ:
EXLP) today announced a transaction between the two parties and a
financing commitment for a new asset-backed securitization facility for
Exterran Partners.
Exterran Partners has agreed to acquire contracts serving 18 customers
from Exterran Holdings and its affiliates, together with approximately
900 compressor units used to provide compression services under those
contracts, comprising approximately 273,000 horsepower. The transaction
will include approximately 6% (by available horsepower) of the combined
U.S. contract operations business of Exterran Holdings and Exterran
Partners. The transaction, which is subject to standard closing
conditions, including the expiration or termination of the applicable
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, is expected to close in November 2009.
The total value of the transaction is approximately $144 million,
including estimated transaction costs. In funding the transaction,
Exterran Partners intends to borrow approximately $58 million under a
new asset-backed securitization facility and issue approximately $86
million of new equity to Exterran Holdings, comprised of approximately
4.74 million common units and approximately 97,000 general partner units.
Exterran Partners has received a financing commitment for a new $150
million asset-backed securitization facility, to be arranged by Wells
Fargo Securities, LLC and provided by Wachovia Bank, N.A., a
wholly-owned subsidiary of Wells Fargo & Company. This facility, which
will mature in 2013, is expected to provide debt capacity to help fund
this and future acquisition transactions. Interest payable on this new
facility is expected to accrue at a variable rate of one month LIBOR
plus 3.5%. Exterran Partners will be required to enter into fixed
interest rate swaps with respect to at least 85% of outstanding
borrowings under this facility.
“We are pleased with this transaction, which we believe will enhance
Exterran Partners’ distributable cash flow and strengthen its financial
position, while the new securitization facility will diversify and
expand the capacity of its debt structure and extend its debt maturity
profile,” said David S. Miller, Chief Financial Officer of Exterran
Partners’ managing general partner. “The transaction is expected to
expand Exterran Partners’ contract operations fleet to comprise
approximately 31%, by available horsepower, of the combined Exterran
Holdings and Exterran Partners U.S. contract operations business. We
believe this acquisition will strengthen Exterran Partners’ market
position as a leading provider of compression services in the United
States, second only to Exterran Holdings as measured by both operating
and available horsepower.”
“We believe that Exterran Holdings will benefit from its continued
ownership interest in Exterran Partners and continue to expect to offer
the balance of Exterran Holdings’ U.S. contract operations business to
Exterran Partners over time,” added J. Michael Anderson, Senior Vice
President and Chief Financial Officer of Exterran Holdings. “Exterran
Holdings expects to use a portion of the transaction proceeds to enhance
its capital position through the reduction of debt.”
In connection with and upon closing of the transaction, the omnibus
agreement between Exterran Partners and Exterran Holdings will be
amended to reflect adjustments in the cap on selling, general and
administrative costs allocable from Exterran Holdings to Exterran
Partners based on such costs incurred by Exterran Holdings on behalf of
Exterran Partners from $6.0 million per quarter to $7.6 million per
quarter while the cap on operating costs will remain at $21.75 per
horsepower per quarter. These caps will be extended for one year and
will now terminate on December 31, 2010, unless otherwise extended.
The board of directors of the general partner of Exterran Partners
approved the transaction based on a recommendation from its conflicts
committee. The conflicts committee, which is comprised entirely of
independent directors, retained independent legal and financial advisors
to assist it in evaluating and negotiating the transaction.
About Exterran Holdings and Exterran Partners
Exterran Holdings, Inc. is a global market leader in full service
natural gas compression and a premier provider of operations,
maintenance, service and equipment for oil and gas production,
processing and transportation applications. Exterran Holdings serves
customers across the energy spectrum—from producers to transporters to
processors to storage owners. Headquartered in Houston, Texas, Exterran
and its over 10,000 employees have operations in over 30 countries.
Exterran Partners, L.P. provides natural gas contract operations
services to customers throughout the United States. Exterran Holdings
indirectly owns a majority interest in Exterran Partners.
For more information, visit www.exterran.com.
Forward-Looking Statements
All statements in this release (and oral statements made regarding the
subjects of this release) other than historical facts are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements rely on
a number of assumptions concerning future events and are subject to a
number of uncertainties and factors, many of which are outside the
control of Exterran Holdings and Exterran Partners (the “Companies”),
which could cause actual results to differ materially from such
statements. Forward-looking information includes, but is not limited to
statements regarding the ability of the Companies to complete their
proposed transaction and the expected timing of the closing of the
transaction; Exterran Partners’ expected means of financing the
transaction, including the availability and terms of the expected
financing; the expected benefits of the transaction to Exterran Holdings
and Exterran Partners; and Exterran Holdings’ intention to continue to
offer the balance of its U.S. contract operations assets to Exterran
Partners.
While the Companies believe that the assumptions concerning future
events are reasonable, they caution that there are inherent difficulties
in predicting certain important factors that could impact the future
performance or results of their business. Among the factors that could
cause results to differ materially from those indicated by such
forward-looking statements are: changes in the capital and financial
markets that impact the effect of the drop-down of additional assets to
Exterran Partners; local, regional, national and international economic
conditions and the impact they may have on the Companies and their
customers; changes in tax laws that impact master limited partnerships;
conditions in the oil and gas industry, including a sustained decrease
in the level of supply or demand for oil and natural gas and the impact
on the price of oil and natural gas; Exterran Holdings’ ability to
timely and cost-effectively obtain components necessary to conduct the
Companies’ business; changes in political or economic conditions in key
operating markets, including international markets; changes in safety
and environmental regulations pertaining to the production and
transportation of oil and natural gas; as to each of the Companies, the
performance of the other entity; the results of the review of the
proposed transaction by regulatory agencies and the failure to satisfy
various other conditions to the closing of the transaction; the
satisfaction of the conditions under Exterran Partners’ financing
commitment letter and changes in equity and debt markets impacting the
ability of Exterran Partners to finance the transaction in the manner
contemplated.
These forward-looking statements are also affected by the risk factors,
forward-looking statements and challenges and uncertainties described in
Exterran Holdings’ Annual Report on Form 10-K for the year ended
December 31, 2008, Exterran Partners’ Annual Report on Form 10-K for the
year ended December 31, 2008, and those set forth from time to time in
the Companies’ filings with the Securities and Exchange Commission,
which are currently available at www.exterran.com.
Except as required by law, the Companies expressly disclaim any
intention or obligation to revise or update any forward-looking
statements whether as a result of new information, future events or
otherwise.
Source: Exterran Holdings, Inc. & Exterran Partners, L.P.
Exterran
Investors:
David Oatman, 281-836-7035
or
Media:
Susan
Nelson, 281-836-7297