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”) 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.
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.
