Business Context and Reporting Period
This Form 8-K Current Report was filed by NGL Energy Partners LP on February 10, 2012, regarding events occurring on February 6, 2012. The filing documents the completion of a previously announced asset acquisition.
Key Financial Metrics
Transaction Value: The Partnership acquired assets for an adjusted purchase price of approximately $67.8 million in cash.
Payment Terms: The purchase price is subject to further adjustment for certain specified working capital items.
Financial Statements: This filing does not contain specific revenue, profit, cash flow, margin, debt, or liquidity metrics for the Partnership or the acquired assets. The Partnership indicated it will file required financial statements of the business acquired and pro forma financial information by an amendment to this report no later than 71 days from the filing date.
Material Changes
The primary material change is the expansion of the Partnership's asset base through the acquisition of substantially all assets comprising the propane operations of North American Propane, Inc. and its affiliates. The acquired assets include:
- Retail propane and distillate operations.
- Wholesale supply and marketing operations.
- Three propane terminals.
These operations are located in Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, Pennsylvania, and Rhode Island.
Outlook, Risks, and Contingencies
Management Commentary: The transaction was executed pursuant to an Asset Purchase Agreement dated January 16, 2012. The Partnership issued a press release on February 6, 2012, announcing the completion.
Risks and Contingencies: The Asset Purchase Agreement contains representations, warranties, and provisions to allocate risk among the parties. The filing explicitly states that the agreement should not be relied upon as a description of the state of affairs of the parties at the time of entry. The final purchase price remains contingent on working capital adjustments.
Investor Verification Checklist
- Verify the final purchase price after working capital adjustments are calculated.
- Review the forthcoming financial statements of the acquired business (due within 71 days) to assess historical profitability and cash flow.
- Examine the pro forma financial information to understand the impact of the acquisition on the Partnership's consolidated financial position.
- Confirm the operational integration status of the three new terminals and retail/wholesale operations in the Northeastern United States.