DCP Midstream to Acquire Michigan Pipeline & Processing
DCP Midstream Partners has signed an agreement to purchase Michigan Pipeline & Processing, a privately held company engaged in natural gas gathering and treating services for natural gas produced from the Antrim Shale of northern Michigan and natural gas transportation within Michigan. The sellers are two privately held companies.
Under the terms of the acquisition, the partnership will pay a purchase price of $145 million, subject to certain customary post-closing purchase price adjustments, plus up to an additional $15 million to the sellers depending on the earnings of the assets after a three-year period. The partnership intends to pay for the acquisition with debt under its existing credit facility. The acquisition is expected to close in October 2008.
Mark Borer, president and CEO of DCP Midstream Partners, said: “This acquisition provides accretion and future growth opportunities for our unitholders. These assets have an attractive position in an active drilling area and provide opportunities to pursue additional service links in the midstream value chain. This acquisition allows us to further diversify our operations in a new geographic area while adding 100% fee-based revenues to our contract mix.”