Highlights the Reasons Why the Pending
Transaction Maximizes Value and is in the Best Interests of
Unitholders
Urges Unitholders to Vote “FOR” Transaction in
Advance of Special Meeting of Unitholders on December 30, 2024
Martin Midstream Partners L.P. (“MMLP”) (Nasdaq: MMLP) today
announced the filing of an investor presentation with the U.S.
Securities and Exchange Commission highlighting that the Company’s
pending transaction with Martin Resource Management Corporation
(“MRMC”) maximizes value for and is in the best interests of
unitholders. The Conflicts Committee and the Board of Directors of
Martin Midstream GP LLC (the “GP Board”) unanimously recommend that
unitholders use the WHITE proxy card or WHITE voting
instruction form to vote “FOR” the transaction in advance of
the upcoming MMLP Special Meeting of unitholders, which is
scheduled for December 30, 2024.
The presentation can be found at MaximizeValueforMMLP.com.
Highlights of the presentation include:
The Transaction Is the Culmination of an Extensive Review
Process Led by the Conflicts Committee
- The Conflicts Committee, which consists of three entirely
independent directors, conducted a robust review of the MRMC
transaction to maximize value.
- With support from independent legal and financial advisors, the
Conflicts Committee worked hard to negotiate in the best interests
of MMLP and all unitholders, including MMLP’s unaffiliated
unitholders.
- The thorough review took place over nine months and involved
seven rounds of price negotiations with MRMC, resulting in a
transaction price that is nearly one dollar per unit more than the
original offer price.
- The Conflicts Committee and GP Board unanimously and in good
faith determined that the MRMC transaction is fair to and in the
best interests of MMLP and unaffiliated holders of MMLP common
units.
The Transaction Delivers Superior and Certain Cash Value, and
Immediate Liquidity to Unitholders
- The all-cash offer of $4.02 per common unit owned reflects a
significant 34.0% premium to MMLP’s market closing price prior to
MRMC’s initial proposal made on May 24, 2024, and a 41.3% premium
to MMLP’s trailing 30-day volume weighted average price (“VWAP”)
prior to the initial announcement on May 24, 2024, meaningfully
exceeding the premium delivered in precedent transactions.
- This valuation implies a total enterprise value / expected 2025
EBITDA multiple of 5.4x, which represents a robust uplift relative
to MMLP’s historical trading multiple of 4.6x.
The Transaction Is the Best Available Alternative; MMLP Does
Not Expect Near-Term Increases in Distributions
- The MRMC transaction is expected to deliver far greater value
than MMLP could deliver on a standalone basis.
- MMLP Management forecasts flat growth for the foreseeable
future, projecting a ~0% EBITDA CAGR from 2025-2028 and no
anticipated future drop downs from MRMC.
- MMLP upside remains severely limited given minimal trading
liquidity and diminished appeal of MLP structure with
investors.
- Balance Sheet improvement remains management’s primary
objective with no anticipated near-term material increase in
distributions. Given a refinancing of MMLP’s existing bonds would
be prohibitively expensive, the primary objective is to pay down
existing debt with cash flow from operations.
- Additionally, MMLP’s limited growth prospects only exacerbate
the need for near-term de-levering.
There Is No Realistic Path for MMLP to Complete a Transaction
with Another Party
- MRMC owns 100% of the General Partner interests in MMLP, giving
it ultimate control and veto power regarding the sale of the
General Partner.
- The purchase of MMLP by an outside party would likely
necessitate the purchase of the General Partner.
- MRMC has repeatedly stated that neither the General Partner nor
its General Partner ownership interest in MMLP is for sale and
therefore MMLP cannot complete a transaction with another
party.
The Conflicts Committee and GP Board unanimously recommend that
unitholders vote “FOR” the proposal to approve the transaction and
the merger agreement.
Unitholders who have questions or would like additional
information or assistance voting their units should contact Martin
Midstream Partners L.P.’s proxy solicitor:
Innisfree M&A Incorporated
Toll-free at (877) 750-8334 (from the U.S. and Canada) or
at +1 (412) 232-3651 (from other countries)
Advisors
The Conflicts Committee engaged Munsch Hardt Kopf & Harr,
P.C., Potter Anderson & Corroon LLP, and Houlihan Lokey, Inc.
as its legal and financial advisors. MRMC engaged Baker Botts
L.L.P. and Wells Fargo Securities, LLC as its legal and financial
advisors.
About MMLP
Martin Midstream Partners L.P. (NASDAQ: MMLP) headquartered in
Kilgore, Texas, is a publicly traded limited partnership with a
diverse set of operations focused primarily in the Gulf Coast
region of the United States. MMLP’s primary business lines include:
(1) terminalling, processing, and storage services for petroleum
products and by-products; (2) land and marine transportation
services for petroleum products and by-products, chemicals, and
specialty products; (3) sulfur and sulfur-based products
processing, manufacturing, marketing, and distribution; and (4)
marketing, distribution, and transportation services for natural
gas liquids and blending and packaging services for specialty
lubricants and grease. To learn more, visit www.MMLP.com. Follow
Martin Midstream Partners L.P. on LinkedIn, Facebook, and X
(formerly known as Twitter).
About MRMC
MRMC, through its various subsidiaries, is an independent
provider of marketing and distribution of hydrocarbon and
hydrocarbon by-products including asphalt, diesel, natural gas
liquids (“NGLs”), crude oil, base and process oils, and other bulk
tank liquids. Martin Resource LLC is a wholly owned subsidiary of
MRMC that does not engage in any business other than owning 100% of
the equity interests in the General Partner. Cross Oil Refining
& Marketing, Inc. is a wholly owned subsidiary of MRMC and is
engaged in the business of providing base and process oils. Martin
Product Sales LLC is a wholly owned subsidiary of MRMC and is
engaged in the business of marketing and distributing commodities
including asphalt, NGLs, and other petroleum based products.
FORWARD-LOOKING STATEMENTS
This press release includes “forward-looking statements” as
defined by the Securities and Exchange Commission (the “SEC”).
Forward-looking statements are identified by words such as
“anticipate,” “believe,” “expect,” “intend,” “may,” “plan,”
“should,” “will” or similar expressions. These forward-looking
statements and all references to the transaction described herein
rely on a number of assumptions concerning future events and are
subject to a number of uncertainties, including (i) the ability of
the parties to consummate the transaction in the anticipated
timeframe or at all, including MRMC’s ability to fund the aggregate
merger consideration; risks related to the satisfaction or waiver
of the conditions to closing the transaction in the anticipated
timeframe or at all; risks related to obtaining the requisite
regulatory approval and MMLP unitholder approval; disruption from
the transaction making it more difficult to maintain business and
operational relationships; significant transaction costs associated
with the transaction; and the risk of litigation and/or regulatory
actions related to the transaction, (ii) uncertainties relating to
MMLP’s future cash flows and operations, (iii) MMLP’s ability to
pay future distributions, (iv) future market conditions, (v)
current and future governmental regulation, (vi) future taxation,
and (vii) other factors, many of which are outside MMLP’s control,
which could cause actual results to differ materially from such
statements. While MMLP believes that the assumptions concerning
future events are reasonable, it cautions that there are inherent
difficulties in anticipating or predicting certain important
factors. A discussion of these factors, including risks and
uncertainties, is set forth in MMLP’s annual and quarterly reports
filed from time to time with the SEC as well as MMLP’s definitive
proxy statement filed with the SEC on November 27, 2024.
Forward-looking statements speak only as of the date they are made,
and MMLP disclaims any intention or obligation to revise any
forward-looking statements, including financial estimates, whether
as a result of new information, future events, or otherwise except
where required to do so by law.
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION
In connection with the proposed merger, MMLP has filed with the
SEC and furnished to MMLP’s unitholders the definitive proxy
statement on Schedule 14A and a proxy card. MMLP, MRMC and certain
of their affiliates have jointly filed a transaction statement on
Schedule 13E-3 (the “Schedule 13E-3”) with the SEC. This material
is not a substitute for the Merger Agreement, the proxy statement
or the Schedule 13E-3 or for any other document that MMLP has filed
with the SEC in connection with the proposed transaction. The final
proxy statement was mailed to MMLP’s unitholders on or about
November 27, 2024 to the unitholders of record as of the close of
business on November 8, 2024. BEFORE MAKING ANY VOTING DECISION,
MMLP’S UNITHOLDERS ARE URGED TO READ THE MERGER AGREEMENT, THE
PROXY STATEMENT AND THE SCHEDULE 13E-3 AND ANY OTHER DOCUMENTS
FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER OR
INCORPORATED BY REFERENCE IN THE PROXY STATEMENT OR SCHEDULE 13E-3
(INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) CAREFULLY AND IN
THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED MERGER.
Investors and security holders may obtain free copies of the
proxy statement and other relevant documents filed with the SEC by
MMLP through the website maintained by the SEC at www.sec.gov. In
addition, the proxy statement, the Schedule 13E-3, and other
documents filed with the SEC by MMLP are available free of charge
through MMLP’s website at www.MMLP.com, in the “Investor Relations”
tab, or by contacting MMLP’s Investor Relations Department at (877)
256-6644.
PARTICIPANTS IN THE SOLICITATION
MMLP and the directors and executive officers of MMLP’s general
partner, and MRMC and its directors and executive officers, may be
deemed to be participants in the solicitation of proxies from
MMLP’s unitholders in respect of the proposed merger. Information
regarding the persons who may, under the rules of the SEC, be
deemed participants in the solicitation of the unitholders of MMLP
in connection with the proposed transaction, including a
description of their direct or indirect interests, by security
holdings or otherwise, are included in the proxy statement, as
filed with the SEC on November 27, 2024, and other relevant
materials filed with the SEC. Information about the directors and
executive officers of MMLP’s general partner and their ownership of
MMLP common units is also set forth in MMLP’s Form 10-K for the
year ended December 31, 2023, as previously filed with the SEC on
February 21, 2024. To the extent that their holdings of MMLP’s
common units have changed since the amounts set forth in MMLP’s
Form 10-K, such changes have been or will be reflected on
Statements of Change in Ownership on Form 4 filed with the SEC.
Free copies of these documents may be obtained as described in the
paragraphs above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241211410004/en/
Investor Relations Contact: Sharon Taylor Executive Vice
President and Chief Financial Officer (877) 256-6644 ir@mmlp.com
Media Contact: Andrew Siegel / Melissa Johnson / Jenna
Shinderman Joele Frank 212.355.4449
Grafico Azioni Martin Midstream Partners (NASDAQ:MMLP)
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