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American Midstream Closes Acquisition of Delta House Interest and Increases Revolving Credit Facility by 50% to $750 Million

DENVER--(BUSINESS WIRE)--American Midstream Partners, LP (NYSE: AMID) (“Partnership”) announced today that it closed the acquisition of a minority interest in Delta House from an affiliate of ArcLight Capital Partners, LLC (“ArcLight”), which controls the general partner of the Partnership. The Partnership acquired 25 percent of ArcLight’s 51.7 percent controlling interest in Delta House, a fee-based, semi-submersible floating production system (FPS) and associated oil and gas export pipelines in the deepwater Gulf of Mexico. In addition, as previously announced the Partnership intends to recommend to its board of directors the resumption of annualized distribution increases of approximately five percent, beginning with the distribution for the fourth quarter 2015 payable in February 2016.

The Partnership acquired the interest in Delta House for total consideration of $162 million, which equates to an Adjusted EBITDA multiple of approximately five times for the next twelve months and full-year 2016, and is immediately accretive to the Partnership’s current distribution. The acquisition was funded using a combination of net proceeds from the 7.5 million common unit offering that closed September 15, 2015, and borrowings under the revolving credit facility.

Revolving Credit Facility Upsize

On September 18, 2015, the Partnership executed an amendment to its revolving credit facility to increase borrowing capacity from $500 million to $750 million, with the option to further increase borrowing capacity to $900 million. The Partnership expects to use the credit facility to fund growth and for other Partnership purposes. The syndicate of 17 banks is led by Bank of America, N.A., as Administrative Agent, Collateral Agent, L/C Issuer and Lender. Natixis Bank, BNP, and NBH Capital Finance joined the credit facility as new lenders.

“The drop down of an initial interest in Delta House demonstrates ArcLight’s ongoing strong sponsorship of American Midstream and complements our existing eastern Gulf of Mexico operations to further expand our footprint into the operating core of the Mississippi Canyon, one of the most prolific regions of the Gulf of Mexico,” stated Steve Bergstrom, Executive Chairman, President and Chief Executive Officer. “Delta House is a world-class offshore production handling facility that contributes significant long-term, fee-based cash flows to American Midstream, increasing our fee-based gross margin to greater than 90 percent in 2016. The...