Sprague Resources LP to Acquire Natural Gas Marketing Business
Santa’s natural gas marketing and electricity brokerage business, headquartered in
“I am excited to announce another outstanding strategic acquisition for Sprague’s natural gas business," said
“As we work to close our latest acquisition, Sprague’s financial position remains very strong. Coverage remains high and more than sufficient to meet our stated cash distribution growth goals, we have been de-leveraging our balance sheet from already modest levels with excess cash flows from operations, and our credit facility has ample liquidity available to fund organic capex and meaningful near term acquisition growth without additional equity issuance,” said
Sprague intends to fund the transaction with borrowings from its senior secured credit facility. Sprague believes the transaction will be immediately accretive to distributable cash flow per unit upon closing, which is expected to occur within thirty days.
This press release may include forward-looking statements. These forward-looking statements involve risks and uncertainties and other factors that are difficult to predict and many of which are beyond management’s control. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements that are described more fully in Sprague’s prospectus, our Annual Report on Form 10-K filed with the
Definitions of Non-GAAP Financial Measures
EBITDA and adjusted EBITDA in this news release are used as supplemental financial measures by management and external users of Sprague’s financial statements, such as investors, commercial banks, trade suppliers and research analysts, to assess:
- The financial performance of Sprague’s assets, operations and return on capital without regard to financing methods, capital structure or historical cost basis;
- The ability of Sprague’s assets to generate cash sufficient to pay interest on its indebtedness and make distributions to its equity holders;
- The viability of acquisitions and capital expenditure projects;
- The market value of its inventory and natural gas transportation contracts for financial reporting to its lenders, as well as for borrowing base purposes; and
- Repeatable operating performance that is not distorted by non-recurring items or market volatility.
Sprague defines EBITDA as net income before interest, income taxes, depreciation and amortization. Sprague defines adjusted EBITDA as EBITDA increased by unrealized hedging losses and decreased by unrealized hedging gains, in each case with respect to refined products and natural gas inventory, prepaid forward contracts and natural gas transportation contracts.
EBITDA and adjusted EBITDA are not prepared in accordance with GAAP. These measures should not be considered as alternatives to net income, income from operations, cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP.
Taylor Hudson+1 603.430.5397 firstname.lastname@example.org