Summit Midstream Partners, LP’s Acquisition of Summit Midstream Partners, LLC

Baker Botts L.L.P. represented Summit Midstream Partners, LP in this transaction, while Latham & Watkins LLP represented Energy Capital Partners. Akin Gump Strauss Hauer & Feld LLP advised the conflicts committee of Summit Midstream.

On May 3, 2020, Summit Midstream Partners, LP, announced that it has entered into a definitive agreement with Energy Capital Partners II, LLC to acquire Summit Midstream Partners, LLC, the privately held company that indirectly owns SMLP’s general partner, Summit Midstream GP, LLC, as well as 5.9 million SMLP common units owned by ECP, for $35 million in cash plus warrants covering 10 million SMLP common units.

As part of the GP Buy-in Transaction, ECP will lend the full $35 million of cash proceeds back to SMLP, which SMLP intends to utilize to enhance its liquidity position and for general corporate purposes.  The acquisition will result in a more simplified corporate structure whereby Summit Investments and all of its subsidiaries will become wholly owned subsidiaries of SMLP.

Summit Investments owns 100% of Summit Midstream Partners Holdings, LLC (“SMP Holdings”), which owns 100% of the GP, 45.3 million SMLP common units, cash on hand, and the $180.75 million deferred purchase price obligation receivable, all of which will remain outstanding as of the closing.  SMP Holdings will continue as the borrower under a $158.2 million term loan, which is secured by approximately 34.6 million of the SMLP common units owned by SMP Holdings and the GP interest.

Upon the closing of the GP Buy-in Transaction, all directors affiliated with ECP will resign from the Board of Directors of the GP (the “Board”) and the Board will be comprised of a majority of independent directors who will be subject to public election on a staggered basis beginning in 2022.

SMLP expects the GP Buy-in Transaction to close in the second quarter of 2020, subject to certain closing conditions.

Summit Midstream Partners, LLC beneficially owns a 48.0% limited partner interest in SMLP and indirectly owns and controls the general partner of SMLP, Summit Midstream GP, LLC, which has sole responsibility for conducting the business and managing the operations of SMLP. Summit Investments is a privately held company controlled by Energy Capital Partners II, LLC, and certain of its affiliates. An affiliate of Energy Capital Partners II, LLC directly owns a 6.3% limited partner interest in SMLP.

The Baker Botts team included Joshua Davidson (Picture); Jason Rocha; Sarah J. Dodson; Emmie Proctor; Rachel Collier; Justin Hoffman; Jeremy Moore; Daniel L. Tristan; Clint Culpepper; Mike Bresson; Jared Meier; Eric Winwood.

Latham & Watkins LLP represented Energy Capital Partners with a team led by Houston partner Ryan Maierson on M&A matters, Los Angeles/New York partner Jeff Greenberg on finance matters, New York partner David Raab on tax matters and Washington, D.C. partner Amy Rigdon on fund matters.

Akin Gump Strauss Hauer & Feld LLP advised the conflicts committee of Summit Midstream with a team led by Lisa Hearn. The team included John Goodgame, Eric Muñoz, Chip Cowell, Jocelyn Tau and Lisa Garrett.

Involved fees earner: Eugene Cowell – Akin Gump; Lisa Garrett – Akin Gump; John Goodgame – Akin Gump; Lisa Leiman Hearn – Akin Gump; Eric Leslie Munoz – Akin Gump; Jocelyn Tau – Akin Gump; Michael Bresson – Baker Botts; Rachel Collier – Baker Botts; Clint Culpepper – Baker Botts; Joshua Davidson – Baker Botts; Sarah Dodson – Baker Botts; Justin Hoffman – Baker Botts; Jared Meier – Baker Botts; Jeremy Moore – Baker Botts; Emmie Proctor – Baker Botts; Jason Rocha – Baker Botts; Daniel Tristan – Baker Botts; Eric Winwood – Baker Botts; Jeffrey Greenberg – Latham & Watkins; Ryan Maierson – Latham & Watkins; David Raab – Latham & Watkins; Amy Rigdon – Latham & Watkins;

Law Firms: Akin Gump; Baker Botts; Latham & Watkins;

Clients: Energy Capital Partners; Summit Midstream Partners (Conflicts Committee); Summit Midstream Partners, LP;

Author: Ambrogio Visconti