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SemGroup completes Maurepas Pipeline transaction

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World Pipelines,

SemGroup® Corporation has announced that it has closed on the sale of a 49% interest in Maurepas Pipeline (Maurepas Pipeline, LLC) to investment funds managed by Alinda Capital Partners (Alinda) for US$350 million, subject to customary post-closing adjustments. The transaction was structured as the sale of Class B interests and values Maurepas at approximately 13 times earnings before interest, taxes and depreciation.

Under the terms of the agreement, SemGroup has an option to acquire Alinda’s interest prior to the fifth anniversary of closing, after a 24 month non-call period. The call price is based on a predetermined fixed return on Alinda’s investment, including capital contributions.

“This high-value sale of a minority interest in Maurepas moves SemGroup significantly closer toward achieving our leverage goals,” said SemGroup President and CEO Carlin Conner. “In addition to paying down debt and de-levering our balance sheet with a very efficient cost of capital transaction, we plan to reinvest some of the proceeds in high-return areas surrounding our footprint. Additionally, the terms of the transaction give us the ability to buy back Alinda’s interest in Maurepas, a cash flow-stable pipeline serving Gulf Coast refineries, at favourable terms.”

SemGroup will remain the majority owner and operator of the pipeline system, which consists of three separate transportation pipes serving refineries in the Gulf Coast region of Louisiana.

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