General | Deals - Acquisition, Mergers, Divestitures

Tallgrass Energy Seriously Looking at Trailblazer Pipeline Co.

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   |    Friday,February 28,2014

Tallgrass Energy Partners LP  has reported a potential acquisition deal with Trailblazer Pipeline Company.

Trailblazer owns and operates a 436-mile pipeline system that traverses from Colorado through Southeastern Wyoming to Beatrice, Nebraska. This pipeline provides an outlet for Rocky Mountain gas seeking Midwest and East Coast markets.

Pursuant to a right of first offer between TEP and Tallgrass Development, Trailblazer Pipeline Company has been offered to TEP for purchase. A Special Committee of the Board of Directors of TEP’s general partner, consisting solely of independent directors, has been formed and is evaluating the offer with assistance from external advisors engaged by the Committee. A settlement agreement has been reached in Trailblazer's tariff rate case, and that agreement is currently awaiting certification from the presiding Administrative Law Judge and final approval from the Federal Energy Regulatory Commission.

Tallgrass President and CEO David G. Dehaemers, Jr. said, "If consummated, we expect a successful acquisition of Trailblazer by TEP to be immediately accretive to unitholders. Although final terms have not yet been reached, we currently expect that the proposed acquisition could result in an increase in our annualized distribution of at least $0.20 to $0.25 per unit, based on an assumed acquisition price ranging from $160-165 million."

If the Partnership reaches an agreement with Tallgrass Development to purchase Trailblazer, the acquisition could close as early as the end of March 2014. However, the transaction has not been executed at this time and is subject to final negotiations and approval by the Special Committee and by the Board of Directors of TEP’s general partner.

Dehaemers added: "When approved, this acquisition would represent another milestone in the Partnership’s continued growth and delivery on one of the attractive acquisition opportunities that we have previously discussed. As always, we will continue to remain focused on operational excellence, strategic execution and growth. Once the Trailblazer transaction is concluded we expect to recommend to our Board of Directors an increase in our annualized distribution of at least $0.20."