Proskauer advised Suburban Propane Partners, L.P. in its acquisition and related debt and equity financing of Inergy, L.P.'s retail propane operations for approximately $1.8 billion. As a result of the acquisition, Suburban, a nationwide distributor of propane, fuel oil and related products and services, as well as a marketer of natural gas and electricity, is now one on the largest retail marketers of propane in the United States, with approximately 1.3 million customers in 41 states.
The acquisition, which closed August 1, comprised $1 billion in aggregate principal amount of newly issued Suburban senior notes, $184.8 million in cash paid to tendering Inergy noteholders in connection with a private exchange offer and $590 million of new Suburban common units distributed to Inergy, L.P., and Inergy Sales & Service, Inc., all but $5.9 million of which is expected to be distributed by Inergy to its unitholders on or about September 14.
At closing, Suburban drew $225 million on a senior secured 364-day incremental term loan, which, together with available cash, was used mainly to finance the cash portion of the private exchange offer.
Following the closing, Suburban conducted an underwritten public equity offering for 6,300,000 common units, which was priced at $37.61 and which closed August 14. Suburban received approximately $226.5 million of net proceeds from the offering, which it used to repay the 364-day incremental term loan.
On August 15, the underwriters exercised their over-allotment option to purchase an additional 945,000 common units representing limited partner interests in Suburban at a price of $37.61 per common unit. Suburban received approximately $34.1 million of net proceeds of the over-allotment option, which closed August 20, and will use the proceeds for working capital and general partnership purposes.
Partner Charles E. Dropkin (Finance) led the Proskauer team, which included partners James P. Gerkis (Mergers & Acquisitions, Capital Markets), Stuart L. Rosow (Tax), Marvin M. Goldstein (Labor-Management Relations), Frank Lopez, Justin Breen, Frank Zarb (Capital Markets), Gregory D. Ruback (Finance), Colin Kass (Antitrust) and Richard H. Rowe (Corporate Governance); special counsel John R. Ingrassia (Mergers & Acquisitions); and associates Daniel L. Forman, Charley E. Lozada, Jonah L. Price, Ron J. Tanner, Kevin M. Shah, Jessica Chen, Sharon Haberman (Corporate), Anne Kim and Stephen I. Brecher (Tax).