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April 2014 MidCon Acquisition
 3 Months Ended
Mar. 31, 2014
April 2014 MidCon Acquisition  
April 2014 MidCon Acquisition

17.  April 2014 MidCon Acquisition

 

On February 27, 2014, the Partnership entered into a Purchase and Sale Agreement with MidCon Compression, L.L.C. (“MidCon”) to acquire natural gas compression assets, including a fleet of 337 compressor units, comprising approximately 444,000 horsepower, a tract of real property and the facility located thereon, a fleet of vehicles, personal property and parts inventory from MidCon (the “April 2014 MidCon Acquisition”). In connection with entering into this agreement, the Partnership made an escrow deposit of $17.0 million, which is reflected in intangible and other assets, net, in our condensed consolidated balance sheet as of March 31, 2014. The compressor units were previously used by MidCon to provide compression services to a subsidiary of Access Midstream Partners LP (“Access”). On April 10, 2014, the Partnership completed the April 2014 MidCon Acquisition for $362.8 million, funding it with a combination of net proceeds from an equity offering and a senior notes offering (see Note 19). Effective as of the closing of the acquisition, the Partnership and Access entered into a seven-year contract operations services agreement under which the Partnership will provide compression services to Access. During the three months ended March 31, 2014, the Partnership incurred transaction costs of approximately $1.5 million related to the April 2014 MidCon Acquisition, which is reflected in other (income) expense, net, in our condensed consolidated statements of operations.

 

At the closing of the acquisition, the Partnership directed MidCon to sell $9.4 million of the assets acquired in the acquisition, including a tract of real property and the facility located thereon, a fleet of vehicles, personal property and parts inventory, to our wholly-owned subsidiary Exterran Energy Solutions, L.P., an indirect parent company of the Partnership.

 

The initial accounting for the April 2014 MidCon Acquisition was incomplete at the time these financial statements were available for issuance. We intend to complete the allocation of the acquisition price to identifiable assets and liabilities associated with the April 2014 MidCon Acquisition in the second quarter of 2014 and provide required disclosures in our consolidated financial statements beginning in the second quarter of 2014.