BETHESDA, Md.–(BUSINESS WIRE)–Enviva Partners, LP (NYSE: EVA) (“Enviva,” the “Partnership,” “we,”
“us,” or “our”) today announced that it had agreed to purchase (the
“Hamlet Transaction”) the sponsor’s interest in its first development
joint venture, Enviva Wilmington Holdings, LLC (the “First JV”). The
First JV owns a wood pellet production plant under construction in
Hamlet, North Carolina (the “Hamlet plant”) and a firm, 15-year
take-or-pay off-take contract (the “MGT contract”) to supply MGT Power
Ltd.’s Tees Renewable Energy Plant with nearly one million metric tons
per year (“MTPY”) of wood pellets, following a ramp period. In addition,
the Partnership announced that it has agreed to make the second and
final payment (the “Second Payment”) for its October 2017 acquisition of
the deep-water marine terminal in Wilmington, North Carolina (the
“Wilmington terminal”) and to commence the associated terminal services
agreement to handle contracted volumes from the Hamlet plant (the
“Hamlet Throughput”).

Highlights:

• The Hamlet Transaction is expected to generate net income in the
  range of $10.4 million to $13.4 million and adjusted EBITDA in the
  range of $26.0 million to $29.0 million once the Hamlet plant and the
  MGT contract are fully ramped.
• With the Hamlet Transaction and the Hamlet Throughput, the
  Partnership expects full-year 2019 net income to be in the range of
  $25.6 million to $33.6 million, adjusted EBITDA to be in the range of
  $130.0 million to $138.0 million, and distributable cash flow to be in
  the range of $92.0 million to $100.0 million, prior to any
  distributions attributable to incentive distribution rights paid to
  our general partner.
• The Hamlet Transaction and Hamlet Throughput associated with the
  Second Payment are expected to be immediately accretive to
  distributable cash flow per common unit; as a result, the Partnership
  now expects to distribute at least $2.65 per common unit for full-year
  2019 and between $2.87 and $2.97 per common unit for full-year 2020.
• The Partnership has agreed to issue approximately $200.0 million in
  common units, which, when combined with borrowings under its existing
  $350.0 million senior secured revolving credit facility, would fully
  finance the Hamlet Transaction, the Second Payment, and the previously
  announced production capacity expansions at the Partnership’s
  Northampton and Southampton production plants.
• The Partnership revised its annual target distribution coverage
  ratio from 1.15 to 1.20 times, on a forward basis.

“We’re very excited that, with the transactions announced today, we
expect to be able to deliver double-digit annual distribution growth,
along with higher coverage levels, for the foreseeable future,” said
John Keppler, Chairman and Chief Executive Officer of Enviva. “Our
sponsor intends to recycle the proceeds it receives from these
transactions into the build-out of the Pascagoula cluster, which we
believe further enhances the long-term growth profile of the
Partnership, as we expect to have the opportunity to acquire these
assets.”

Hamlet Transaction

The Partnership expects to complete the Hamlet Transaction for total
consideration of $165.0 million on or about April 2, 2019, subject to
customary closing conditions (the “Closing”). The Hamlet plant is
expected to achieve commercial operations (“COD”) in June 2019 and to
reach its nameplate production capacity of approximately 600,000 metric
tons per year (“MTPY”) in 2021. The Hamlet Transaction includes the MGT
contract, which commences in 2019, ramps to full supply volumes in 2021,
and continues through 2034. As previously announced, the Partnership
already has contracts with the First JV to supply 470,000 MTPY of the
volumes under the MGT contract. The incremental sales volume of
approximately 500,000 MTPY would extend the weighted-average remaining
term of the Partnership’s off-take contracts to 10.6 years and increase
its contracted revenue backlog to $9.1 billion as of February 1, 2019.

The Hamlet Transaction is expected to generate net income for the
Partnership in the range of $10.4 million to $13.4 million and adjusted
EBITDA in the range of $26.0 million to $29.0 million, after full
production capacity is achieved and the MGT contract is fully ramped in
2021. On this basis, the purchase price for the Hamlet Transaction,
including the Incremental Hamlet Capital (as defined below), represents
an adjusted EBITDA multiple of approximately seven times. Thereafter,
the net income and adjusted EBITDA from the Hamlet Transaction are
expected to increase, such that, in 2024, the Hamlet Transaction is
expected to generate net income for the Partnership in the range of
$18.1 million to $22.1 million and adjusted EBITDA in the range of $33.0
million to $37.0 million.

Upon the Closing, the Partnership expects to make an initial payment of
$75.0 million to the sponsor consisting of 1,681,238 common units
representing limited partner interests in the Partnership (“common
units”) at a price of $29.74 per unit (which was the undiscounted 20-day
volume-weighted average price as of March 20, 2019), or approximately
$50.0 million of common units, and $25.0 million in cash. Upon COD, the
Partnership expects to make a second payment in the amount of $50.0
million in cash. The third and final payment of $40 million in cash is
expected to be made on January 2, 2020.

As the Partnership expects to complete the Hamlet Transaction before the
Hamlet plant achieves COD and the MGT contract reaches full contracted
volumes, the sponsor has signed and is expected to deliver at the
Closing a make-whole agreement with the Partnership (the “Make-Whole
Agreement”) pursuant to which, among other things, the sponsor will (i)
guarantee certain cash flows from the Hamlet plant until June 30, 2020
and (ii) reimburse construction cost overruns in excess of budgeted
capital expenditures for the Hamlet plant, subject to certain limited
exceptions. In addition, in connection with the Closing, the sponsor has
signed and is expected to deliver agreements with (a) the First JV,
pursuant to which the sponsor will waive certain management services and
other fees that otherwise would be owed by the First JV from the Closing
until the later of July 1, 2019 and COD and (b) the Partnership,
pursuant to which the sponsor will waive certain management services and
other fees that otherwise would be owed by the Partnership from the
Closing until June 30, 2020 (collectively, the “MSA Fee Waivers”).

For the Hamlet Transaction, Evercore served as exclusive financial
advisor and Baker Botts LLP served as legal counsel to the conflicts
committee of the board of directors of the Partnership’s general
partner. Vinson & Elkins LLP served as legal counsel to the sponsor.

Wilmington Terminal Second Payment

The Partnership made an initial payment of $56.0 million to the First JV
as partial payment of the $130.0 million purchase price for the
Wilmington terminal in October 2017 (the “Wilmington Acquisition”).

On April 1, 2019, the Partnership expects to make the second and final
payment of $74.0 million in deferred consideration for the Wilmington
Acquisition consisting of 1,732,311 common units at an expected price of
$28.69 per common unit (which was the 20-day volume-weighted average
price as of the closing of the Wilmington Acquisition), or approximately
$49.7 million in common units, subject to certain adjustments, and $24.3
million in cash. The First JV will distribute substantially all of the
consideration for the Second Payment prior to the Closing.

Upon completion of the Second Payment, the Partnership expects to begin
benefiting from incremental adjusted EBITDA from fees associated with
Hamlet Throughput.

Financing Activities

In addition to the approximately $100.0 million in common units issued
as partial consideration for the Hamlet Transaction and the Second
Payment, the Partnership expects to issue an aggregate of 3,508,778
common units to investors in exchange for expected net proceeds of
approximately $100.0 million in a registered direct offering (the
“Registered Offering”) pursuant to an effective registration statement
on file with the U.S. Securities and Exchange Commission at a purchase
price of $28.50 per unit, representing a 4.2 percent discount to the
20-day volume-weighted average price as of March 20, 2019.

We expect to use proceeds from the Registered Offering, along with
borrowings under the Partnership’s existing $350.0 million senior
secured revolving credit facility and the common units expected to be
issued as consideration for the Hamlet Transaction and the Second
Payment, to finance (i) the $165.0 million purchase price for the Hamlet
Transaction, (ii) the $74.0 million in deferred consideration for the
Wilmington Acquisition, (iii) the $24.0 million in capital expenditures,
net of payments under the Make-Whole Agreement, expected to be required
to complete construction of the Hamlet plant (the “Incremental Hamlet
Capital”), and (iv) the approximately $130.0 million expected to be
required for the Partnership’s previously announced production capacity
expansions at its wood pellet production plants in Northampton, North
Carolina and Southampton, Virginia (the “Mid-Atlantic Expansions”).

The Partnership does not expect to issue any additional common units for
financing purposes until the next acquisition or investment by the
Partnership.

Guidance Update

With the benefit of the Hamlet Transaction and the Hamlet Throughput,
the Partnership now expects full-year 2019 net income to be in the range
of $25.6 million to $33.6 million and adjusted EBITDA to be in the range
of $130.0 million to $138.0 million. The Partnership expects to incur
maintenance capital expenditures of $6.8 million and interest expense
net of amortization of debt issuance costs and original issue discount
of $41.9 million, and to benefit from $10.7 million associated with the
MSA Fee Waivers in 2019; as a result, the Partnership expects full-year
2019 distributable cash flow to be in the range of $92.0 million to
$100.0 million, prior to any distributions attributable to incentive
distribution rights paid to our general partner. Similar to previous
years, the Partnership expects adjusted EBITDA and distributable cash
flow for the second half of 2019 to be significantly higher than for the
first half of the year. For full-year 2019, the Partnership now expects
to distribute at least $2.65 per common unit. For full-year 2020, the
Partnership expects to distribute between $2.87 and $2.97 per common
unit.

The Partnership expects the Hamlet plant to achieve its nameplate
production capacity and to benefit from the fully ramped Mid-Atlantic
Expansions in 2021. As a result, for full-year 2021, the Partnership
expects net income to be in the range of $87.7 million to $117.7 million
and adjusted EBITDA to be in the range of $210.0 million to $240.0
million.

The guidance amounts provided above, including the distribution
expectations, include the benefit of the Hamlet Transaction, the Hamlet
Throughput, and the Mid-Atlantic Expansions, and reflect the associated
financing activities described above. In addition, the distributable
cash flow guidance provided above for 2019 includes the benefit of the
MSA Fee Waivers. The guidance amounts provided above do not include the
impact of any additional acquisitions by the Partnership from the
sponsor, its joint ventures, or third parties, or any recoveries related
to the previously reported fire incident at the Partnership’s marine
export terminal in Chesapeake, Virginia (the “Chesapeake Incident”) and
Hurricanes Florence and Michael (the “Hurricane Events”). The
Partnership’s quarterly income and cash flow are subject to seasonality
and the mix of customer shipments made, which vary from period to
period. When determining the distribution for a quarter, the Board
evaluates the Partnership’s distribution coverage ratio on an annual
basis and considers the expected distributable cash flow, net of
expected amounts attributable to incentive distribution rights, for the
next four quarters. On that basis, the Partnership’s targeted annual
distribution coverage ratio for the full years of 2019 and 2020 is at
least 1.20 times.

“We were very encouraged by the public equity market’s interest in the
offering, which, in combination with our supportive sponsor and undrawn
capacity on our revolver, enabled us to conservatively finance, on a
roughly 50/50 equity and debt basis, the approximately $400 million we
expect will be required for the Mid-Atlantic Expansions, the Hamlet
Transaction, and the Second Payment for the Wilmington terminal,” said
Shai Even, Chief Financial Officer of Enviva. “With the increased scale
and diversification of our business made possible by these investments,
we expect to exit 2020 with run-rate adjusted EBITDA well in excess of
$200 million annually.”

This press release does not constitute an offer to sell or a
solicitation of an offer to buy the securities described herein, nor
shall there be any sale of these securities in any state or jurisdiction
in which such an offer, solicitation, or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction.

About Enviva Partners, LP

Enviva Partners, LP (NYSE: EVA) is a publicly traded master limited
partnership that aggregates a natural resource, wood fiber, and
processes it into a transportable form, wood pellets. The Partnership
sells a significant majority of its wood pellets through long-term,
take-or-pay agreements with creditworthy customers in the United Kingdom
and Europe. The Partnership owns and operates six plants with a combined
production capacity of nearly three million metric tons of wood pellets
per year in Virginia, North Carolina, Mississippi, and Florida. In
addition, the Partnership exports wood pellets through its owned marine
terminal assets at the Port of Chesapeake, Virginia and the Port of
Wilmington, North Carolina and from third-party marine terminals in
Mobile, Alabama and Panama City, Florida.

To learn more about Enviva Partners, LP, please visit our website at www.envivabiomass.com.

Non-GAAP Financial Measures

We use adjusted EBITDA and distributable cash flow to measure our
financial performance.

Adjusted EBITDA

We view adjusted EBITDA as an important indicator of our financial
performance. We define adjusted EBITDA as net income or loss excluding
depreciation and amortization, interest expense, income tax expense,
early retirement of debt obligations, non-cash unit compensation
expense, asset impairments and disposals, changes in unrealized
derivative instruments related to hedged items included in gross margin
and other income and expense, and certain items of income or loss that
we characterize as unrepresentative of our ongoing operations. Adjusted
EBITDA is a supplemental measure used by our management and other users
of our financial statements, such as investors, commercial banks and
research analysts, to assess the financial performance of our assets
without regard to financing methods or capital structure.

Distributable Cash Flow

We define distributable cash flow as adjusted EBITDA less maintenance
capital expenditures and interest expense net of amortization of debt
issuance costs, debt premium, original issue discounts, and including
the MSA Fee Waivers. We use distributable cash flow as a performance
metric to compare the cash-generating performance of the Partnership
from period to period and to compare the cash-generating performance for
specific periods to the cash distributions (if any) that are expected to
be paid to our unitholders. We do not rely on distributable cash flow as
a liquidity measure.

Limitations of Non-GAAP Measures

Adjusted EBITDA and distributable cash flow are not financial measures
presented in accordance with accounting principles generally accepted in
the United States (“GAAP”). We believe that the presentation of these
non-GAAP financial measures provides useful information to investors in
assessing our financial condition and results of operations. Our
non-GAAP financial measures should not be considered as alternatives to
the most directly comparable GAAP financial measures. Each of these
non-GAAP financial measures has important limitations as an analytical
tool because they exclude some, but not all, items that affect the most
directly comparable GAAP financial measures. You should not consider
adjusted EBITDA or distributable cash flow in isolation or as
substitutes for analysis of our results as reported under GAAP.

Our definitions of these non-GAAP financial measures may not be
comparable to similarly titled measures of other companies, thereby
diminishing their utility.

The following table provides a reconciliation of the estimated range of
adjusted EBITDA to the estimated range of net income, in each case for
the twelve months ending December 31, 2019 (in millions):

		Twelve Months Ending December 31, 2019
Estimated net income		$25.6 – 33.6
Add:
Depreciation and amortization		49.1
Interest expense		43.1
Transaction expense		0.5
Non-cash unit compensation expense		9.7
Other non-cash expenses		2.0
Estimated adjusted EBITDA		$130.0 – 138.0
Plus:
Management services fee waivers		10.7
Less:
Interest expense net of amortization of debt issuance costs, debt premium and original issue discounts		41.9
Maintenance capital expenditures		6.8
Estimated distributable cash flow		$92.0 – 100.0

The following table provides a reconciliation of the estimated range of
adjusted EBITDA to the estimated range of net income, in each case for
the twelve months ending December 31, 2021 (in millions):

		Twelve Months Ending December 31, 2021
Estimated net income		$87.7 – 117.7
Add:
Depreciation and amortization		61.0
Interest expense		47.8
Non-cash unit compensation expense		10.5
Other non-cash expenses		3.0
Estimated adjusted EBITDA		$210.0 – 240.0

The following table provides a reconciliation of the estimated adjusted
EBITDA to the estimated net income associated with the Hamlet
Transaction for the twelve months ending December 31, 2021 (in millions):

		Twelve Months Ending December 31, 2021
Estimated net income		$10.4 – 11.4
Add:
Depreciation and amortization		9.2
Interest expense		6.4
Estimated adjusted EBITDA		$26.0 – 27.0

The following table provides a reconciliation of the estimated adjusted
EBITDA to the estimated net income associated with the Hamlet
Transaction for the twelve months ending December 31, 2022 (in millions):

		Twelve Months Ending December 31, 2022
Estimated net income		$11.4 – 13.4
Add:
Depreciation and amortization		9.2
Interest expense		6.4
Estimated adjusted EBITDA		$27.0 – 29.0

The following table provides a reconciliation of the estimated adjusted
EBITDA to the estimated net income associated with the Hamlet
Transaction for the twelve months ending December 31, 2024 (in millions):

		Twelve Months Ending December 31, 2024
Estimated net income		$18.1 – 22.1
Add:
Depreciation and amortization		9.2
Interest expense		5.7
Estimated adjusted EBITDA		$33.0 – 37.0

Cautionary Note Concerning Forward-Looking Statements

Certain statements and information in this press release, including
those concerning our future results of operations, acquisition
opportunities, and distributions, may constitute “forward-looking
statements.” The words “believe,” “expect,” “anticipate,” “plan,”
“intend,” “foresee,” “should,” “would,” “could,” or other similar
expressions are intended to identify forward-looking statements, which
are generally not historical in nature. These forward-looking statements
are based on the Partnership’s current expectations and beliefs
concerning future developments and their potential effect on the
Partnership. Although management believes that these forward-looking
statements are reasonable as and when made, there can be no assurance
that future developments affecting the Partnership will be those that it
anticipates. The forward-looking statements involve significant risks
and uncertainties (some of which are beyond the Partnership’s control)
and assumptions that could cause actual results to differ materially
from the Partnership’s historical experience and its present
expectations or projections. Important factors that could cause actual
results to differ materially from forward-looking statements include,
but are not limited to: (i) the volume and quality of products that we
are able to produce or source and sell, which could be adversely
affected by, among other things, operating or technical difficulties at
our plants or deep-water marine terminals; (ii) the prices at which we
are able to sell our products; (iii) failure of the Partnership’s
customers, vendors, and shipping partners to pay or perform their
contractual obligations to the Partnership; (iv) the creditworthiness of
our contract counterparties; (v) the amount of low-cost wood fiber that
we are able to procure and process, which could be adversely affected
by, among other things, disruptions in supply or operating or financial
difficulties suffered by our suppliers; (vi) changes in the price and
availability of natural gas, coal, or other sources of energy; (vii)
changes in prevailing economic conditions; (viii) our inability to
complete acquisitions, including acquisitions from our sponsor, or to
realize the anticipated benefits of such acquisitions; (ix) inclement or
hazardous environmental conditions, including extreme precipitation,
temperatures and flooding; (x) fires, explosions or other accidents;
(xi) changes in domestic and foreign laws and regulations (or the
interpretation thereof) related to renewable or low-carbon energy, the
forestry products industry, the international shipping industry, or
power generators; (xii) changes in the regulatory treatment of biomass
in core and emerging markets; (xiii) our inability to acquire or
maintain necessary permits or rights for our production, transportation,
or terminaling operations; (xiv) changes in the price and availability
of transportation; (xv) changes in foreign currency exchange or interest
rates, and the failure of our hedging arrangements to effectively reduce
our exposure to the risks related thereto; (xvi) risks related to our
indebtedness; (xvii) our failure to maintain effective quality control
systems at our production plants and deep-water marine terminals, which
could lead to the rejection of our products by our customers; (xviii)
changes in the quality specifications for our products that are required
by our customers; (xix) labor disputes; (xx) the effects of the
anticipated exit of the United Kingdom from the EU on our and our
customers’ businesses; (xxi) our inability to hire, train or retain
qualified personnel to manage and operate our business and newly
acquired assets; (xxii) our inability to borrow funds and access capital
markets; (xxiii) our mis-estimation of the timing and extent of our
ability to recover the costs associated with the Chesapeake Event and
the Hurricanes through our insurance policies and other contractual
rights; (xxiv) risks related to our project-development activities, and
(xxv) our inability to complete our construction projects on time and
within budget.

For additional information regarding known material factors that could
cause the Partnership’s actual results to differ from projected results,
please read its filings with the U.S. Securities and Exchange
Commission, including the Annual Report on Form 10-K and the Quarterly
Reports on Form 10-Q most recently filed with the SEC. Readers are
cautioned not to place undue reliance on forward-looking statements,
which speak only as of the date thereof. The Partnership undertakes no
obligation to publicly update or revise any forward-looking statements
after the date they are made, whether as a result of new information or
future events or otherwise.