Partners' Capital

12 Months Ended

Dec. 31, 2018

10. Partners’ Capital

Merger Transaction

On April 26, 2018, Archrock completed the acquisition of all of our outstanding common units that it did not already own and, as a result, we became its wholly-owned subsidiary. With the closing of the Merger, Archrock issued 57.6 million shares of its common stock at a fixed exchange ratio of 1.40 shares for each of the 41.2 million common units not owned by Archrock prior to the Merger. Additionally, all outstanding treasury units were retired and our incentive distribution rights, all of which were previously owned by Archrock prior to the Merger, were canceled and ceased to exist. As a result of the Merger, our common units are no longer publicly traded. Our Notes were not impacted by the Merger and remain outstanding.

Prior to the Merger, public unitholders held a 57% ownership interest in us and Archrock owned our remaining equity interests, including 29,064,637 common units and 1,422,458 general partner units, collectively representing a 43% interest.

Capital Offering

In August 2017, we sold, pursuant to a public underwritten offering, 4,600,000 common units, including 600,000 common units, pursuant to an over-allotment option. We received net proceeds of $60.3 million after deducting underwriting discounts, commissions and offering expenses, which we used to repay borrowings outstanding under our Credit Facility. In connection with this sale and as permitted under our Partnership Agreement, we sold 93,163 general partner units to our General Partner so it could maintain its 2% general partner interest in us. We received net proceeds of $1.3 million from the General Partner contribution.

Cash Distributions

As of the closing of the Merger, any distributions are paid to Archrock as the owner of all outstanding common and general partner units. Prior to the Merger, we made cash distributions of available cash (as defined in our Partnership Agreement) from operating surplus in the following manner:


•	first, 98% to all common unitholders, pro rata, and 2% to our general partner, until each unit has received a distribution of $0.4025;


•	second, 85% to all common unitholders, pro rata, and 15% to our general partner, until each unit has received a distribution of $0.4375;


•	third, 75% to all common unitholders, pro rata, and 25% to our general partner, until each unit has received a total of $0.5250; and


•	thereafter, 50% to all common unitholders, pro rata, and 50% to our general partner.

On January 29, 2019, our board of directors declared a quarterly distribution of $0.2400 per common unit that was paid on February 13, 2019.

Archrock Partners, L.P. 10-K