Enviva Partners, LP (the “Partnership” or “we”) announced that Enviva Wilmington Holdings, LLC (the “Hancock JV”), a joint venture between an affiliate of Enviva Holdings, LP and affiliates of John Hancock Life Insurance Company, has offered to sell the entity which owns the wood pellet production plant in Sampson County, North Carolina (the “Sampson plant”), along with a 10-year, 420,000 metric ton per year (“MTPY”) off-take contract with an affiliate of DONG Energy, to the Partnership. The transaction also includes a 15-year, 95,000 MTPY off-take contract with the Hancock JV and a third-party shipping contract. As previously announced, the board of directors of the Partnership’s general partner has formed a Conflicts Committee comprised solely of independent directors to evaluate the offer. The final purchase price and other terms are subject to negotiation with, and approval of, the Conflicts Committee, but the Partnership currently expects the final purchase price to be between $170 million and $180 million. Assuming terms of the acquisition are agreed upon, the Partnership expects the transaction to close on or about January 3, 2017.
Construction of the Sampson plant is complete and the plant is producing wood pellets for sale. The Sampson plant is expected to produce approximately 500,000 MTPY of wood pellets in 2017 and to reach its full production capacity of approximately 600,000 MTPY in 2019. The Sampson plant is expected to generate incremental Adjusted EBITDA of approximately $22 million for 2017, increasing to approximately $27 million once full production capacity is achieved. Assuming completion of the drop-down acquisition, the weighted average remaining term of the Partnership’s off-take contracts would extend to 9.7 years and our contracted revenue backlog would increase to $5.7 billion as of January 1, 2017.