Agway Energy Services Parent to Acquire Retail Propane Operations of Inergy, L.P.

Suburban Propane Partners, L.P., which markets electricity and natural gas through subsidiary Agway Energy Services, has reached a definitive agreement with Inergy, L.P. and various affiliates to acquire the sole membership interest in Inergy Propane, LLC, including certain wholly-owned subsidiaries of Inergy Propane, LLC, and the assets of Inergy Sales.

Suburban is acquiring Inergy Propane for total consideration of approximately $1.8 billion, consisting of: (i) $1.0 billion of newly issued Suburban senior notes and $200.0 million in cash and, (ii) $600.0 million of new Suburban common units, which will be distributed to Inergy and Inergy Sales, the majority of which will subsequently be distributed by Inergy to its unitholders.

Inergy Propane conducts its propane operations in 33 states from 338 customer service centers. Its footprint includes propane retail operations, under various regional brands, in all of the restructured states in the Northeast and Mid-Atlantic, plus Illinois, Ohio, Texas, Michigan, and Georgia.

Based on fiscal year 2011, the Inergy Propane Acquisition will add approximately 600,000 propane customers and 325 million retail propane gallons to Suburban's approximately 600,000 existing propane customers and nearly 300 million retail propane gallons sold. Suburban believes that after giving effect to this transaction it will be the third largest retail marketer of propane in the United States, measured by retail gallons sold in the calendar year 2011.

Michael J. Dunn, Jr., President and Chief Executive Officer, said, "This acquisition is an important strategic step for Suburban by effectively doubling the size of the company and expanding our national presence into eleven new states."

The transaction is subject to customary closing conditions including approval under the Hart-Scott-Rodino Act, and is expected to close in the second half of calendar year 2012.