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Lehigh Gas Partners was formed to engage in the wholesale distribution of motor fuels and to own and lease real estate used in the retail distribution of motor fuels. Lehigh Gas Partners owns and leases sites in Pennsylvania, New Jersey, Ohio, New York, Massachusetts, Kentucky, New Hampshire and Maine.
The company sold 6 million units under the ticker symbol LGP for $20 each, which raised $120 million for the newly formed company.
In addition, the IPO underwriters, Raymond James & Associates Inc. and Robert W. Baird & Co. Inc., will now be granted a 30-day window to purchase an addition 900,000 common units of LGP.
Lehigh Gas Partners also announced it will enter into a 15-year supply agreement to distribute motor fuels to its former parent company's gas stations.
Lehigh Gas Partners is a master limited partnership (MLP). To become an MLP, a company must generate at least 90 percent of its income from what the Internal Revenue Service calls "qualifying" assets. The production, processing or transportation of oil are three things deemed as qualifying assets.
According to the Wall Street Journal, Lehigh Gas Partners is the sixth MLP IPO since August. MLPs often pay large dividends. Lehigh Gas Partners noted it intends to pay a minimum of $1.75 per unit on an annual basis.
MPLX is expecting to sell 15 million MLP units in a deal expected to raise $300 million. MPLX owns, operates, develops and acquires crude oil, refined products and other hydrocarbon-based product pipelines and other assets.