Southcross Energy Partners announced completion of the acquisition of gathering, treating, compression and transportation assets from Southcross Holdings.

In conjunction with the acquisition, Southcross also completed an amendment of its revolving credit facility. Among other things, the amendment provides Southcross with increased financial flexibility including higher leverage covenants through the third quarter of 2016. The amendment also establishes a higher applicable borrowing margin on Southcross’ revolvery when its leverage ratio is above 5.01 as well as certain restrictions on the payment of quarterly distributions on the Southcross subordinated units held by Holdings.

The acquired assets consist of Holdings’ Valley Wells sour gas gathering and treating system, compression assets that are part of the Valley Wells and Lancaster gathering and treating systems and two NGL pipelines that are currently under construction. The Valley Wells gathering system is located in the Eagle Ford Shale area in La Salle County and services production from EP Energy.

The transaction has been approved by the board of directors of the general partner of each of Southcross and Holdings, as well as by the conflicts committee of the Southcross board. The conflicts committee, which is composed entirely of independent directors, retained Akin Gump Strauss Hauer & Feld as independent legal counsel and Jefferies LLC as independent financial advisors to assist in evaluating the transaction. Jefferies delivered to the conflicts committee an opinion as to the fairness from a financial point of view, to holders of SXE common units not affiliated with Holdings, of the consideration paid by Southcross to Holdings.

“We are extremely pleased to complete the acquisition of these assets which we expect will be accretive to distributable cash flow and deleveraging for our balance sheet,” said John Bonn, CEO of Southcross’ general partner. “This transaction marks the first drop-down from Holdings and is consistent with our growth plans for Southcross. It is an excellent example of the benefits from our 2014 TexStar combination transaction and demonstrates the potential for future drop-downs from Holdings.”