Summary
This 8-K filing by Enterprise Products Partners L.P. (EPD) reports on a material definitive agreement entered into on September 30, 2010. The Partnership acquired all outstanding membership interests in Enterprise Products Transportation Company LLC (ETC), which operates the Enterprise Transportation Company trucking business. This acquisition was made from Enterprise Products Company (EPCO) in exchange for 523,306 common units of EPD, valued at approximately $20 million based on the average closing price of EPD units over a 20-day trading period. The agreement includes customary indemnification provisions for both parties regarding pre- and post-closing matters, with specific deductibles and caps on EPCO's indemnity.
Key Highlights
- 1EPD entered into a Contribution Agreement with EPCO on September 30, 2010.
- 2The Partnership acquired all membership interests in Enterprise Products Transportation Company LLC (ETC).
- 3ETC operates the Enterprise Transportation Company trucking business.
- 4The acquisition was made in exchange for 523,306 EPD common units.
- 5The value of the common units issued was based on a $20 million purchase price, calculated using EPD's average unit price over the 20 trading days prior to the transaction.
- 6The agreement includes indemnification clauses for both EPCO and the Partnership concerning pre- and post-closing liabilities.
- 7The transaction was approved by the Audit, Conflicts and Governance Committee and the board of directors of EPD's general partner.
Frequently Asked Questions
This filing reports the entry into a material definitive agreement, specifically the acquisition by Enterprise Products Partners L.P. (EPD) of Enterprise Products Transportation Company LLC (ETC) from Enterprise Products Company (EPCO).
EPD financed the acquisition by issuing 523,306 of its common units to EPCO. The value of these units was approximately $20 million, determined by the average closing price of EPD's common units over the 20 trading days leading up to September 28, 2010.
ETC is the successor entity that conducts the Enterprise Transportation Company trucking business, previously operated by EPCO.
The filing mentions indemnification provisions where EPCO agrees to indemnify EPD for certain pre-closing losses, subject to a $2.0 million deductible and a $20.0 million cap. EPD also agreed to indemnify EPCO for certain matters. These provisions aim to allocate financial responsibility for potential pre- and post-closing issues.