Inergy to acquire Star Gas propane, create fifth largest US propane retailer

Nov. 19, 2004
Inergy LP, Kansas City, Mo., agreed to acquire Star Gas Propane LP, the propane operating partnership of Star Gas Partners LP, Stamford, Conn., for $475 million.

By OGJ editors

HOUSTON, Nov. 19 -- Inergy LP, Kansas City, Mo., agreed to acquire Star Gas Propane LP, the propane operating partnership of Star Gas Partners LP, Stamford, Conn., for $475 million.

Upon completion, the acquisition will create the fifth-largest US retail propane operator. The transaction is expected to close in December, pending regulatory approvals.

Standard & Poor's Ratings Services kept Star Gas Partners on CreditWatch with negative implications, noting uncertainty about its ability to secure liquidity. As of June 30, Star Gas Partners had $510 million of debt.

"Although the proposed asset sale will provide proceeds for potentially significant debt reduction, S&P's remain concerned about the abrupt sale of Star Gas's more stable propane business," said S&P analyst Brian Janiak.

Star Gas Propane represents more than 50% of the total cash flow for its parent company, he added.