American Midstream Acquires Costar Midstream For $470 Mln

(RTTNews) - American Midstream Partners LP (AMID) Tuesday said it acquired Costar Midstream LLC from Energy Spectrum Partners VI LP and Costar management for about $470 million.

Costar is an onshore gathering and processing company with its primary gathering, processing, fractionation, and off-spec condensate treating and stabilization assets in East Texas and the prolific Permian basin, with a significant crude oil gathering system project underway in the Bakken oil play.

The acquisition was funded with 6.9 million American Midstream common units issued directly to Energy Spectrum and Costar senior management and $272 million of cash. The acquisition closed October 14, 2014.

American Midstream expects to invest $70 million to $80 million over the next 12-18 months to complete the Bakken, Longview rail, and Permian off-spec condensate blending development projects.

CEO Steve Bergstrom said, "The Costar deal is consistent with our growth strategy to pursue third-party acquisitions that enhance our current footprint of natural gas and crude oil midstream assets."