CNX funded the transaction with $21.5 million of available borrowings and a $67.3 million issuance of convertible preferred units representing limited partner interests to Consol.
The preferred units were issued at $17.01 per unit, a 15% premium to the volume weighted average price of CNXC's common units over the 15 trading days ending on September 29 2016.
Under the terms of the transaction the preferred units will pay quarterly distributions in additional preferred units or cash, equal to an annual rate of 11.00% of the issue price, subject to certain adjustments.
CNX Coal CEO of resources Jimmy Brock said the assets were familiar to company unit holders and the transaction supported the company’s previously outlined growth strategy.
"With coal markets beginning to recover, we believe the timing is right for us to consummate this acquisition,” he said.
“The transaction has been structured to allow more balance sheet flexibility for CNXC as well as create a larger base of cash flow to support ongoing partnership distributions."
Consol president and CEO Nicholas DeIuliis said it was a win-win for everybody.
"This transaction moves CONSOL one step closer to executing our strategic goal of fully separating the coal and gas businesses, while generating cash proceeds from the sale,” he said.
“All in, this deal strengthens CNXC's balance sheet and liquidity position, while benefitting Consol."