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NGL Energy Partners to exit retail propane business with $900M sale

NGL Energy Partners LP agreed to sell its remaining retail propane business to a subsidiary of Superior Plus Corp. for $900 million, more than 10 times its fiscal 2018 adjusted EBITDA.

The decision to exit the retail propane business comes as the partnership shifts its focus to its water solutions and crude logistics businesses, which have more growth opportunities in its core basins, according to a May 30 news release.

NGL Energy Partners plans to use proceeds from the sale to immediately repay $800 million of debt, which includes CapEx incurred through early fiscal 2019. The transaction will also reduce the weather-dependency of the partnership's NGL earnings, according to the release.

"Retail propane has been a stable asset for NGL and has grown through bolt-on acquisitions over time, but it is not a growth driver for the partnership in the future," said NGL Energy Partners CEO Mike Krimbill.

RBC Capital Markets LLC and Intrepid Partners LLC are acting as financial advisers to NGL. McAfee Taft and Winston & Strawn LLP are acting as legal counsel.