SemGroup Corporation Announces $350 Million Private Placement of 7% Series A Convertible Preferred Shares


TULSA, Okla., Jan. 16, 2018 (GLOBE NEWSWIRE) -- SemGroup® Corporation (NYSE:SEMG) today announced that it has entered into an agreement for the private placement of $350 million of newly authorized 7% Series A Convertible Preferred Shares (the “Preferred Shares”) at a price of $1,000 per share with approximately 350,000 Preferred Shares to be outstanding at the closing of the private placement. The Preferred Shares are convertible into SemGroup common stock based on a conversion price of $33.00 per share after 18 months, at the purchasers’ option, and after three years at SemGroup’s option, subject to certain conditions. The Preferred Shares will pay quarterly dividends which, at SemGroup’s option, may be paid in additional Preferred Shares in respect of any fiscal quarter ending on or prior to June 30, 2022. The transaction is expected to close by the end of January 2018, and is subject to certain closing conditions.

The net proceeds, after deducting offering and transaction expenses, are expected to be approximately $343 million. SemGroup expects to use the net proceeds to repay amounts borrowed under the company’s revolving credit facility, to fund anticipated capital needs for 2018 and for general corporate purposes. Investors include funds managed by Warburg Pincus (“Warburg”), CIBC Atlantic Trust and Tortoise Capital Advisors, L.L.C. Per the terms of the agreement, Warburg will appoint John Rowan, Warburg Managing Director, as a non-voting observer to SemGroup’s board of directors.

“We are very pleased with this transaction and to have these leading firms invest in SemGroup,” said SemGroup President and CEO Carlin Conner. “Warburg’s history of being a long-term investor, coupled with their industry knowledge, will bring significant value to SemGroup as we continue to focus our strategy on North American midstream opportunities. We have made significant progress in our capital raise efforts during the past two months to meet our 2018 capital needs.”

“The SemGroup management team has developed a strong growth trajectory for the business, with an attractive portfolio of assets and robust pipeline of opportunities to serve customers in its focus areas of the Gulf Coast, Mid-Continent and Canada,” commented John Rowan, Managing Director, Warburg Pincus. “We share the Board and management team’s vision for the future of SemGroup, and look forward to our relationship.”

Evercore acted as financial advisor to SemGroup for the sale of the Preferred Shares. Gibson, Dunn & Crutcher LLP served as legal counsel to SemGroup.

SemGroup plans to release fourth quarter 2017 results and provide 2018 guidance in late February.

The securities offered in the private placement have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements of the Securities Act and applicable state laws.

This press release is neither an offer to sell nor a solicitation of an offer to purchase the securities described herein.

About SemGroup
Based in Tulsa, Okla., SemGroup® Corporation (NYSE:SEMG) is a publicly traded midstream service company providing the energy industry the means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end-users and consumers of crude oil, natural gas, natural gas liquids, refined products, residual fuel oil and asphalt. Services include purchasing, selling, processing, transporting, terminalling and storing energy.

SemGroup uses its Investor Relations website and social media outlets as channels of distribution of material company information. Such information is routinely posted and accessible on our Investor Relations website at, our Twitter account and LinkedIn account.

Forward-Looking Statements
Certain matters contained in this Press Release include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995.

All statements, other than statements of historical fact, included in this Press Release may constitute forward-looking statements. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. Factors that might cause actual results to differ include the risk factors discussed from time to time in each of our documents and reports filed with the SEC.

Readers are cautioned not to place undue reliance on any forward-looking statements contained in this Press Release, which reflect management’s opinions only as of the date hereof. Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements.

Investor Relations:
Alisa Perkins

Tom Droege


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Source: SemGroup Corp.
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