Summit Midstream Partners LP (NYSE: SMLP) announced March 18 it closed the drop down acquisition of Red Rock Gathering Co. for $305 million.
Grand River Gathering LLC, Dallas-based SMLP's wholly owned subsidiary, agreed to buy 100% of the equity interests in Red Rock from a subsidiary of Summit Midstream Partners LLC ("Summit Investments") in a drop down acquisition, which is when a corporation sells purchased assets to a partnership.
Summit Investments acquired the Red Rock system in October 2012. Red Rock is a natural gas gathering and processing system located in the Piceance Basin in western Colorado and eastern Utah.
The drop down was financed with the net proceeds from SMLP's primary equity offering of 5.3 million common units and borrowings under its revolving credit facility.
Evercore Partners was independent financial advisor to SMLP board's conflicts committee. Akin Gump Strauss Hauer & Feld LLP was legal advisor.
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