Martin Midstream Partners L.P. (MMLP) entered into a merger agreement on October 3, 2024, to be acquired by Martin Resource Management Corporation (MRMC) for about $729.08 million in cash.
As per the merger agreement, each holder of the public common units of Martin Midstream would receive $4.02 per common unit owned, representing a premium of 11.67% from the stock’s last close.
Martin Midstream provides storage and transportation services for fuels and petrochemicals. It also produces fertilizers and lubricants, with most of its operations located along the U.S. Gulf Coast.
MRMC is led by Ruben S. Martin III. His father started the business in 1951, which later became the foundation for both MRMC and Martin Midstream.
Martin Midstream operates as a tax-efficient master limited partnership (MLP), with ownership divided into publicly traded common units and general partner (GP) units. The GP units have significant influence because they control the MLP’s governance. MRMC holds the GP stake and also owns 15.7% of the common units.
MRMC had offered to acquire Martin Midstream in May for $3.05, which started a bidding war for the fuels storage and transporter that included Nut Tree Capital Management and Caspian Capital. The stock price before the initial offer was $3.
Martin Midstream’s current EV/EBITDA (TTM) ratio is 3.44, below the sector median of 6.30.
MRMC plans to cover the total cost of the merger, expected to close by the end of 2024, using a combination of its current cash reserves, money it earns before the deal is finalized, and loans from its existing credit line, which it plans to expand with an additional term loan when the deal closes. Additionally, $5 million in loans will come from some members of MRMC’s management team.
For a more comprehensive understanding of this merger, please visit the Deal Metrics page here:
The Deal Metrics page for each merger or acquisition includes:
Disclaimer: Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.
Editor’s Note: Baranjot Kaur contributed to this article