Business Context and Reporting Period
This Form 8-K Current Report covers events occurring on August 1, 2013, and August 6, 2013, for NGL Energy Partners LP. The filing primarily details the completion of a material acquisition of water disposal and hauling assets and related corporate governance changes.
Key Financial Metrics and Transaction Details
- Acquisition Consideration: Total aggregate consideration of approximately $239.95 million.
- Cash Component: Approximately $167.95 million paid in cash.
- Equity Component: Approximately $72.0 million paid in common units of the Partnership.
- Units Issued: 2,463,287 common units issued at a price of $29.2490 per unit.
- Escrow: $7.0 million of the purchase price deposited into an escrow account to secure seller indemnification obligations.
- Target Assets: Equity interests in seven entities (collectively the "Acquired Companies") operating a water disposal and hauling business.
Material Changes and Corporate Actions
- Asset Acquisition: Completed the acquisition of the Acquired Companies from Oilfield Water Lines, LP (OWL) and other sellers on August 1, 2013.
- Board Composition: On August 6, 2013, John T. Raymond was elected to the board of directors of the General Partner as the designated representative of EMG II NGL GP Holdings LLC.
- Director Resignation: William A. Zartler resigned from the board of directors of the General Partner following the sale of NGL Holdings, Inc.'s equity interest.
- Governance Amendment: The LLC Agreement of NGL Energy Holdings LLC was amended to grant EMG I and EMG II the right to appoint one director each to the General Partner's board.
Guidance, Risks, and Unusual Items
- Guidance Status: The filing references a press release containing guidance for fiscal year 2014; however, this information is explicitly excluded from being deemed "filed" under Section 18 of the Exchange Act and is not incorporated by reference in this summary.
- Price Adjustments: The purchase price for the acquisition is subject to further adjustment based on the estimated value of acquired working capital.
- Registration Rights: A Registration Rights Amendment was executed to provide piggy-back registration rights for the common units issued in the transaction.
- Financial Metrics: The filing text does not provide specific values for revenue, profit, cash flow, margins, or debt levels for the reporting period.
Investor Verification Checklist
- Verify the final purchase price after working capital adjustments.
- Review the full text of the Transfer Agreements (Exhibits 2.1 through 2.5) for specific indemnification terms and covenants.
- Confirm the impact of the new board composition on future strategic direction.
- Locate the unfiled press release (Exhibit 99.1) to review the excluded fiscal year 2014 guidance.
- Assess the liquidity impact of the $167.95 million cash outlay on the Partnership's balance sheet.