Hi-Crush Partners LP (NYSE:HCLP) has concluded on the procuring of its general partner by acquiring Hi-Crush Proppants LLC. The consideration of the consideration was through 11.0 million newly issued common units. However, the acquisition’s total value for consideration was $96.25 million and its basis was on Friday’s closing price of $8.75 per unit. The partnership brought along the acquiring of the non-economics’ general partner interest. HCLP, on the other hand, abolished its incentive distribution rights (“IDRs”).
There was also the stepping down of six members of the Board of Directors. These were primarily the ones who held seats by Avista Capital Partners and its appointees. However, the partnership will obviously result in the need for nominating a Board of Directors.
The transaction represents a major milestone for Hi-Crush
The Partnership’s Conflicts Committee unanimously approved the terms of the agreement. The committee consists of independent directors of Hi-Crush’s Board of Directors. Nature has it that the partnership is one of the greatest milestones for Hi-Crush. It is one of those steps expected to bring a significant change to Hi-Crush’s structure and service offerings.
The Chief Executive Officer of Hi-Crush, Mr. Robert E. Rasmus who is looking forward to long-term benefits says, “We are excited to reach an agreement and….. We believe this will result in immediate and long-term benefits for the Partnership as we continue the transformation of our business.”
Responding to the evolving business and industry dynamics
Hi-Crush is a strategy in the proppant logistics market and particularly in the North American frac. In addition, it is also supportive of the changing business and industry dynamics. Its improved corporate governance and the ability to respond to the market needs are what has made it remain ahead of the game.
Some of the long-term benefits the partnership is likely to bring along include improved financial flexibility and a lower cost of capital. This is besides an enhanced appeal to a wider range of investors. It will also help in adding value for all stakeholders.
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