Ferrellgas Partners, a U.S. provider of propane by portable tank exchange, announced on Monday that it has agreed to acquire Dallas-based Bridger Logistics, LLC, for a purchase price of approximately $837.5 million. In conjunction with this transaction, Ferrellgas also announced that its Board of Directors has approved a $0.0125 increase in its quarterly distribution rate to $0.5125 per FGP common unit ($2.05 on an annualized basis), effective following the closing of the transaction.
Founded in 2010, Bridger owns and operates assets across the midstream value chain and can provide end-to-end crude oil logistics, including trucking, terminaling, pipeline, rail, and maritime, from the wellhead to end markets across North America. Bridger has operations in 14 states and virtually all major U.S. crude oil production regions, including the Permian, Bakken, Rockies, Niobrara, Mid-Continent, Gulf Coast, and Eagle Ford.
The move positions Ferrellgas to significantly expand its midstream division – established on May 1, 2014, when it acquired Sable Environmental, LLC – and is expected to be immediately accretive to Ferrellgas and supportive of future distribution growth.
“We are extremely pleased to welcome Bridger into the Ferrellgas family,” Stephen L. Wambold, Chief Executive Officer and President of Ferrellgas, said. “It is a remarkable organization with a proven record of developing robust midstream assets and executing long-term growth initiatives. We’ll benefit greatly from their collective experience and deep customer relationships as we continue to pursue midstream-focused growth opportunities.”
Bridger, which was named Inc. Magazine’s “Fastest Growing Energy Company” in 2013, will continue to operate as an independent entity inside of Ferrellgas.
Julio Rios, President and Chief Executive Officer of Bridger, will continue to oversee its operations and will report directly to Mr. Wambold.
“Today marks another exciting step in Bridger’s history,” said Rios. “We believe in Ferrellgas’ long-term strategic vision, and its collective resources create an opportunity for us to expand Bridger’s existing midstream footprint and continue to provide an unmatched level of service to our customers.”
With the addition of Bridger, Ferrellgas now offers a comprehensive portfolio of crude-focused midstream assets, diversifying its existing asset base and creating a platform from which to execute its long-term midstream growth initiatives.
“This is a landmark transaction for Ferrellgas and represents a key milestone in our diversification efforts,” said Todd Soiefer, Ferrellgas’ Senior Vice President of Strategic Development.
“Bridger’s established and growing footprint of crude logistics assets allows us to strategically diversify our existing business and add significant scale to our growing midstream platform.”
The $837.5 million purchase price represents an approximately 8.4x multiple of estimated next twelve months Bridger EBITDA of $100 million. The consideration will consist of approximately $562.5 million of cash and 11.2 million Ferrellgas common units issued directly to the sellers. Bridger’s core executive management team will join Ferrellgas, ensuring a smooth transition and a continued focus on strategic execution. The transaction is expected to close by July 1, 2015 and is subject to customary closing conditions.
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