Dec 21 2016
Enviva Partners, LP completes Sampson Drop-down Acquisition
Enviva Partners, LP (NYSE: EVA) has completed the announced acquisition of the Sampson pellet production plant and associated off-take contracts from it´s sponsor company Enviva Holdings, LP’s a joint venture with affiliates of John Hancock Life Insurance Company.
“We are pleased to announce that the Sampson acquisition, our second drop-down transaction since our IPO last year, was completed ahead of schedule,” said John Keppler, Chairman and Chief Executive Officer.
“The acquisition adds a world-class asset to our production fleet and further diversifies our customer base, and the related financing activities provide significant financial flexibility as we plan for continued long-term growth.”
The Sampson acquisition includes a wood pellet production plant in Sampson County, North Carolina, a 10-year, 420,000 metric tons per year off-take contract with an affiliate of DONG Energy Thermal Power A/S, a 15-year, 95,000 MTPY off-take contract with the Hancock JV, and matching third-party shipping contracts. The acquired off-take contracts extend the weighted average remaining term of the Partnership’s portfolio of off-take contracts to 9.7 years and increase the product sales backlog to $5.7 billion, each as of January 1, 2017.
The Sampson plant is expected to produce approximately 500,000 MTPY of wood pellets in 2017 and to reach its full production capacity of approximately 600,000 MTPY in 2019. The Sampson plant is expected to generate incremental net income and adjusted EBITDA of approximately $2.3 million and $22.0 million, respectively, for 2017, increasing to approximately $6.5 million and $27.0 million, respectively, once full production capacity is achieved. The Partnership’s previously disclosed full-year 2017 guidance for ranges of net income of $31.0 million to $35.0 million and adjusted EBITDA of $110.0 million to $114.0 million include the incremental net income and adjusted EBITDA expected from the Sampson acquisition.
In December 2014, Enviva Wilmington Holdings, LLC began construction of the wood pellet production facility in Sampson County, North Carolina, about 50 miles northwest of Wilmington. Now when fully operational, Sampson will employ 80 people operators, technicians and engineers, with additional indirect employment throughout the facility’s logging and forestry supply chain.
About Enviva Partners, LP
Enviva Partners, LP (NYSE: EVA) is a publicly traded master limited partnership that aggregates a natural resource, wood fiber, and processes it into a transportable form, wood pellets.
The Partnership sells a significant majority of its wood pellets through long-term, take-or-pay agreements with creditworthy customers in the United Kingdom and Europe.
The Partnership owns and operates seven plants with a combined production capacity of approximately 2.8 million metric tons of wood pellets per year in Virginia, North Carolina, Mississippi, and Florida. In addition, the Partnership owns a deep-water marine terminal at the Port of Chesapeake, Virginia, which is used to export wood pellets. Enviva Partners also exports pellets through the ports of Wilmington, North Carolina, Mobile, Alabama and Panama City, Florida.