Risk Factors

        The proposed transactions, including the mergers, are, and upon the completion of the transactions, EnLink Midstream will be, subject to a number of risks, which are described in the section titled "Risk Factors" beginning on page 32. You should carefully read and consider these risks in deciding whether to vote in favor of the proposal to adopt of the merger agreement.

Special Meeting of Crosstex Stockholders

        Where and when:     The special meeting of Crosstex stockholders (the "special meeting") will take place at Crosstex's offices, located at 2501 Cedar Springs Rd., Dallas, Texas 75201, on                , 2014 at                , local time.

        What Crosstex's stockholders are being asked to vote on:     At the special meeting, Crosstex's stockholders will be asked to consider and vote on the following matters:

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the proposal to adopt the merger agreement;



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one or more proposals to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt the merger agreement; and



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a proposal to approve, on an advisory (non-binding) basis, a resolution regarding the compensation payments that will or may be paid by Crosstex to its named executive officers in connection with the Crosstex merger (the "Merger-Related Compensation Proposal").

        Who may vote:     You may vote at the special meeting if you owned shares of Crosstex common stock at the close of business on the record date for determining the stockholders entitled to vote at the special meeting,                , 2014 (provided that such shares remain outstanding on the date of the special meeting). You may cast one vote for each share of Crosstex common stock that you owned on the record date.

        How to vote:     Please complete and submit the enclosed proxy card as soon as possible or transmit your voting instructions by using the telephone or Internet procedures described on your proxy card.

        Vote needed to adopt the merger agreement:     The proposal to adopt the merger agreement must receive the affirmative approval of the holders of at least 67% of the issued and outstanding shares of Crosstex common stock entitled to vote as of the record date (the "Crosstex Stockholder Approval").

        Vote needed to approve any adjournment of the special meeting:     Any proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt the merger agreement requires the affirmative vote of a majority of the votes cast by the stockholders entitled to vote thereon represented at the special meeting in person or by proxy and entitled to vote as of the record date, if a quorum is present. In the absence of a quorum, the holders of a majority of the shares of Crosstex common stock entitled to be voted at the special meeting may adjourn the meeting from time to time.

        Vote needed to approve the Merger-Related Compensation Proposal:     Approval of the Merger-Related Compensation Proposal requires the affirmative vote of a majority of the votes cast by the Crosstex stockholders entitled to vote thereon represented at the special meeting in person or by proxy and entitled to vote as of the record date.

Voting Agreements

        Concurrently with the execution of the merger agreement, funds affiliated with Blackstone/GSO Capital (together, "GSO"), Crosstex's largest stockholder, and each of Crosstex's named executive officers, who collectively with GSO own approximately 19% of the outstanding shares of Crosstex common stock, have entered into voting agreements with Devon, pursuant to which they have agreed,

 

subject to the terms set forth therein, to vote the shares of Crosstex common stock that they hold in favor of the merger agreement and not to transfer any of their shares of Crosstex common stock prior to the consummation of the mergers, except under limited circumstances.

        The voting agreements expire at the earliest to occur of (i) the effective time of the Crosstex merger, (ii) the termination of the merger agreement in accordance with its terms, (iii) a change in the recommendation of the Crosstex merger by the Crosstex Board of Directors (the "Crosstex Board") in accordance with the merger agreement, (iv) such date and time as any amendment or change to the merger agreement is effected without the applicable stockholder's consent that decreases the consideration to be received by the Crosstex stockholders in the Crosstex merger (or, with respect to the GSO voting agreement, such date and time as any amendment or change to any of the transaction agreements is effected without GSO's consent which adversely affects GSO, including any amendment or change that decreases the merger consideration received in the Crosstex merger) or (v) with respect to the GSO voting agreement, 5:00 p.m., Dallas, Texas time on June 30, 2014.

Crosstex Reasons for the Merger; Recommendation of the Crosstex Board

        The Crosstex Board has unanimously (i) determined that the merger agreement and the transactions contemplated thereby are advisable, fair to and in the best interests of Crosstex and its stockholders and (ii) approved and declared advisable the merger agreement and the transactions contemplated thereby. Accordingly, the Crosstex Board unanimously recommends that Crosstex stockholders vote " FOR " the proposal to adopt the merger agreement.

        In determining whether to approve the merger agreement and the transactions contemplated thereby, the Crosstex Board considered the factors described in the section entitled "The Proposed Transactions—Crosstex's Reasons for the Crosstex Merger; Recommendation of the Crosstex Board."

        In connection with the Crosstex Board's determination, a special committee of the Crosstex Board (the "Crosstex Special Committee"), comprised solely of members of the Crosstex Board who were deemed to be independent and disinterested with respect to the interests of the Partnership, considered certain aspects of the merger agreement and the transactions contemplated by the merger agreement relating to certain agreements between Crosstex and the Partnership and other potential or actual conflicts between the interests of Crosstex and those of the Partnership. The Crosstex Special Committee unanimously determined, among other things, that the agreements between Crosstex and the Partnership and the manner in which the terms and conditions of the merger agreement and the transactions contemplated thereby address and resolve such potential or actual conflicts are advisable and fair to, and in the best interests of, Crosstex and its stockholders. The Crosstex Special Committee recommended that the Crosstex Board approve the agreements between Crosstex and the Partnership and the manner in which the terms and conditions of the merger agreement and the transactions contemplated thereby address and resolve such potential or actual conflicts. In making its determination and recommendation, the Crosstex Special Committee considered the factors described in the section entitled "The Proposed Transactions—Crosstex's Reasons for the Crosstex Merger; Recommendation of the Crosstex Board."

Opinion of Crosstex's Financial Advisor

        In connection with the proposed transactions, Crosstex's financial advisor, Citigroup Global Markets Inc., referred to as Citi, delivered a written opinion, dated October 20, 2013, to the Crosstex Board as to the fairness, from a financial point of view and as of the date of the opinion, of the Crosstex Merger Consideration to be received by holders of shares of Crosstex common stock. For purposes of Citi's opinion, Citi evaluated the Crosstex Merger Consideration after taking into account, as a single integrated transaction, the Crosstex merger, the Devon merger (through which 50% of the Midstream Business will be transferred to EnLink Midstream) and the contribution (through which the remaining 50% of the Midstream Business will be transferred to the Partnership). The full text of Citi's

 

written opinion, dated October 20, 2013, which describes the assumptions made, procedures followed, matters considered and limitations on the review undertaken, is attached as Annex F to this proxy statement/prospectus and is incorporated herein by reference. Citi's financial advisory services and opinion were provided for the information of the Crosstex Board (in its capacity as such) in connection with its evaluation of the Crosstex Merger Consideration from a financial point of view and did not address any other aspects or implications of the proposed transactions. Citi was not requested to consider, and its opinion did not address, the underlying business decision of the Crosstex Companies to effect the proposed transactions, the relative merits of the proposed transactions as compared to any alternative business strategies or opportunities that might exist for the Crosstex Companies or the effect of any other transaction in which the Crosstex Companies might engage. Citi's opinion should not be construed as creating any fiduciary duty on Citi's part to any party and such opinion is not intended to be and does not constitute a recommendation as to how any stockholder should vote or act on any matters relating to the proposed transactions or otherwise.

Opinion of the Financial Advisor to the Crosstex Special Committee

        In connection with the proposed transactions, the financial advisor to the Crosstex Special Committee, Evercore Group L.L.C., referred to as Evercore, delivered to the Crosstex Special Committee an oral opinion on October 20, 2013, confirmed by delivery of a written opinion, dated October 20, 2013, to the effect that, as of that date and based on and subject to various assumptions, matters considered and limitations and qualifications described in its opinion, the Crosstex Merger Consideration to be received by the Crosstex stockholders was fair, from a financial point of view, to such stockholders. For purposes of Evercore's opinion, Evercore evaluated the Crosstex Merger Consideration after taking into account, as a single integrated transaction, the Crosstex merger, the Devon merger (through which 50% of the Midstream Business will be transferred to EnLink Midstream) and the contribution (through which the remaining 50% of the Midstream Business will be transferred to the Partnership). The full text of the written opinion of Evercore, dated as of October 20, 2013, which sets forth, among other things, the procedures followed, assumptions made, matters considered and qualifications and limitations on the scope of review undertaken in rendering its opinion, is attached as Annex G to this proxy statement/prospectus and is incorporated by reference in its entirety into this proxy statement/prospectus . Evercore's opinion was addressed to, and provided for the information and benefit of, the Crosstex Special Committee (in its capacity as such) in connection with its evaluation of the fairness of the Crosstex Merger Consideration to the Crosstex stockholders from a financial point of view, and did not address any other aspects or implications of the mergers and the contribution. Evercore's opinion should not be construed as creating any fiduciary duty on Evercore's part to any party and such opinion is not intended to be, and does not constitute, a recommendation to the Crosstex Special Committee or to any other persons in respect of the mergers, including as to how any holder of shares of Crosstex common stock should act or vote in respect of the mergers and the contribution. Evercore's opinion does not address the relative merits of the mergers as compared to any other business or financial strategies that might be available to Crosstex, nor does it address the underlying business decision of Crosstex to engage in the mergers. Evercore did not express any opinion as to the price at which shares of Crosstex common stock will trade at any time.

Interests of Crosstex's Executive Officers and Directors in the Mergers

        In considering the recommendation of the Crosstex Board, Crosstex's stockholders should be aware that certain of the executive officers and directors of Crosstex have interests in the mergers that may differ from, or may be in addition to, the interests of Crosstex's stockholders. These interests may present such executive officers and directors with actual or potential conflicts of interest.

        The Crosstex Board was aware of these different and/or additional interests and considered them, among other matters, in its evaluations and negotiations of the merger agreement. Please see the

 

section titled "The Proposed Transactions—Interests of Crosstex's Executive Officers and Directors in the Mergers" beginning on page 138.

Appraisal Rights

        Under Section 262 of the General Corporation Law of the State of Delaware (the "DGCL"), holders of shares of Crosstex common stock will have the right to obtain an appraisal of the "fair value" of any or all of their shares of Crosstex common stock in connection with the Crosstex merger. To properly demand and perfect appraisal rights, a Crosstex stockholder must not vote in favor of the adoption of the merger agreement, must continue to hold his, her or its shares of common stock through the Effective Time and must strictly comply with all of the procedures required under Section 262 of the DGCL, including submitting a written demand for appraisal to Crosstex prior to a vote being taken on the merger agreement at the special meeting. Failure to strictly comply with Section 262 of the DGCL by a Crosstex stockholder will result in the loss of that stockholder's appraisal rights. Because of the complexity of Delaware law relating to appraisal rights, if any Crosstex stockholder is considering exercising his, her or its appraisal rights, such Crosstex stockholder should seek the advice of his, her or its own legal counsel. A summary of the requirements under Section 262 of the DGCL to exercise appraisal rights is included in this document in the section titled "The Proposed Transactions—Appraisal Rights" beginning on page 149, and the text of Section 262 of the DGCL as in effect with respect to the Crosstex merger is attached as Annex H to this document.

Listing of EnLink Midstream Common Units

        EnLink Midstream Common Units are expected to trade on the New York Stock Exchange ("NYSE") under the ticker symbol "ENLC." Crosstex and Devon have agreed to use their reasonable efforts to cause the EnLink Midstream Common Units to be issued pursuant to the merger agreement to be approved for listing on the NYSE, subject to official notice of issuance.

Delisting and Deregistration of Crosstex Common Stock

        Crosstex's common stock currently trades on the NASDAQ Global Select Market ("NASDAQ") under the ticker symbol "XTXI." If the Crosstex merger is completed, Crosstex common stock will cease to be listed on the NASDAQ and will be deregistered under the Exchange Act.

Regulatory Approvals Required for the Mergers

        Crosstex and Devon have agreed to use their reasonable best efforts to obtain all governmental and regulatory approvals required to complete the transactions contemplated by the merger agreement. These approvals include approval, or the termination or expiration of the applicable waiting period, under the Hart-Scott-Rodino Act of 1976 (the "HSR Act"). Crosstex and Devon each filed the required HSR Act notification and report forms on November 12, 2013, and the 30-day statutory waiting period expired on December 12, 2013. At any time before or after the completion of the mergers, the Department of Justice, the Federal Trade Commission or others could take action under the antitrust laws as deemed necessary or desirable in the public interest, including without limitation seeking to enjoin the completion of the mergers or to permit completion only subject to regulatory concessions or conditions. There can be no assurance that a challenge to the mergers will not be made or that, if a challenge is made, it will not prevail.

Conditions to Completion of the Mergers

        The obligations of the parties to consummate the mergers are subject to the satisfaction or waiver (to the extent permitted by law) of the following conditions:

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the receipt of the Crosstex Stockholder Approval;

 

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the termination or expiration of the waiting period (and any extension thereof) applicable to the mergers under the HSR Act;



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the absence of any decision, ruling or law by any governmental entity (whether temporary, preliminary or otherwise) that enjoins or otherwise prohibits or makes illegal the consummation of either of the mergers;



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the effectiveness of the registration statement on Form S-4, of which this document is a part, and the absence of a stop order suspending effectiveness of such registration statement or any legal proceeding initiated for that purpose;



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the authorization for listing on the NYSE of the EnLink Midstream Common Units issuable in the Crosstex merger and upon conversion of the EnLink Midstream Class B Units;



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the fulfillment (or waiver) of each of the conditions to closing set forth in the contribution agreement (or the reasonable capability of each condition being fulfilled as of the closing of the transactions contemplated by the contribution agreement), as well as the willingness and ability of the parties thereto to consummate the contribution; and



•

the other party's performance of or compliance with, in all material respects, all of the obligations and covenants required to be performed or complied with by it under the merger agreement at or prior to the Closing Date.

        The obligations of Crosstex to complete the mergers are subject to the satisfaction or waiver (to the extent permitted by law) of the following conditions:

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the representations and warranties of the Devon Parties in the merger agreement being true and correct at and as of the Closing Date (or, if made as of a specific date, as of such date), subject to certain materiality thresholds;



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the absence of any events since the execution date of the merger agreement (the "Execution Date") that have had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect with respect to the Midstream Group Entities, as described in "The Merger Agreement—Agreement Not to Solicit Other Offers";



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the receipt of the required closing certificate from Devon, certifying that certain of the closing conditions applicable to the obligations of Crosstex have been fulfilled;



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the receipt by Crosstex of the applicable Devon Party's executed signature page to the partnership agreement of Midstream Holdings and the first offer agreement, as described in "Other Transaction Agreements";



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the receipt by Crosstex of the written opinion of Baker Botts L.L.P., counsel to the Crosstex Companies ("Baker Botts"), dated the Closing Date, with respect to certain U.S. federal income tax matters;



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the delivery of the Crosstex Merger Consideration to the exchange agent; and



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the receipt by Crosstex of evidence reasonably satisfactory to it evidencing the consummation of certain Devon reorganization transactions that must precede the mergers and the transactions contemplated by the contribution agreement.

        The obligations of the Devon Parties to complete the mergers are subject to the satisfaction or waiver (to the extent permitted by law) of the following conditions:

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the representations and warranties of Crosstex in the merger agreement being true and correct at and as of the Closing Date (or, if made as of a specific date, as of such date), subject to certain materiality thresholds;

 

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the absence of any events since the Execution Date that have had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect with respect to Crosstex, as described in "The Merger Agreement—Agreement Not to Solicit Other Offers";



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the receipt of the required closing certificate from Crosstex, certifying that certain of the closing conditions to the obligations of the Devon Parties have been fulfilled;



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the receipt by Devon of the Partnership's executed signature page to the partnership agreement of Midstream Holdings and EnLink Midstream's executed signature page to the EnLink Midstream registration rights agreement, as described in "Other Transaction Agreements"; and



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the receipt by Devon of the written opinion of Vinson & Elkins L.L.P., counsel to the Devon Parties ("Vinson & Elkins"), dated the Closing Date, with respect to certain U.S. federal tax matters.

Expected Timing of the Mergers

        The parties currently expect to complete the transactions, including the mergers, in the first quarter of 2014, subject to the receipt of the Crosstex Stockholder Approval and required regulatory approvals and the satisfaction or waiver of the other conditions to completion of the mergers. Because many of the conditions to completion of the mergers are beyond the control of the parties, exact timing for completion of the transactions cannot be predicted with any amount of certainty.

Obligations with Respect to the Special Meeting and Recommendation to Stockholders

        Under the terms of the merger agreement, Crosstex has agreed to take all actions reasonably necessary to call, give notice of, convene and hold a special meeting of its stockholders, as soon as reasonably practicable following the date that the registration statement on Form S-4, of which this document is a part, is declared effective under the Securities Act and this proxy statement/prospectus is cleared by the SEC, and in any event within 30 days of the date this proxy statement/prospectus is mailed to the Crosstex stockholders (unless otherwise agreed by Crosstex and Devon), to consider and vote on the adoption of the merger agreement. Crosstex has agreed, subject to the Crosstex Board's right to change its recommendation in the circumstances described below, to recommend that its stockholders adopt the merger agreement (the "Crosstex Recommendation") and to use its reasonable best efforts to solicit from its stockholders votes in favor of the adoption of the merger agreement.

Agreement Not to Solicit Other Offers

        The merger agreement contains detailed provisions that restrict Crosstex, its subsidiaries and any of their respective directors, officers or other representatives from, directly or indirectly, soliciting, initiating, knowingly facilitating or knowingly encouraging any inquiries regarding, or the making or submission of any proposal or offer that constitutes or would reasonably be expected to lead to, an Acquisition Proposal (as defined in the section of this document titled "The Merger Agreement—Agreement Not to Solicit Other Offers"). The merger agreement also contains restrictions on Crosstex, its subsidiaries and any of their respective directors, officers or other representatives from participating in any discussions or negotiations regarding any unsolicited Acquisition Proposal and taking certain other related actions, subject to certain exceptions.

Obligation to Maintain Recommendation; Ability to Change Recommendation or Terminate Merger Agreement

        As discussed above, the Crosstex Board has agreed to make the Crosstex Recommendation. Except as described below, neither the Crosstex Board nor any committee thereof may take any of the following actions, each of which is considered a "Crosstex Recommendation Change": (i) fail to make, change, qualify, withhold, withdraw or modify, or publicly propose to change, qualify, withhold,

 

withdraw or modify, the Crosstex Recommendation, (ii) fail to recommend against acceptance of any tender offer or exchange offer for the shares of Crosstex common stock within 10 business days after commencement of any such offer, (iii) adopt, approve or recommend, or publicly propose to approve or recommend, an Acquisition Proposal, (iv) make any public statement that is materially inconsistent with the Crosstex Recommendation or (v) publicly resolve or agree (whether or not publicly) to take any of the foregoing actions.

        Notwithstanding the foregoing, the Crosstex Board shall be permitted to withdraw or change its recommendation and/or terminate the merger agreement (in order to enter into a definitive written agreement with respect to a Superior Proposal (as defined in "The Merger Agreement—Agreement Not to Solicit Other Offers")) at any time prior to receipt of the Crosstex Stockholder Approval when certain specified conditions are met. Such conditions, which include the Crosstex Board's determination in good faith, after consulting with its financial advisor and outside legal advisor, that failing to change its recommendation or terminate the agreement would be inconsistent with the fiduciary duties of the Crosstex directors under applicable law, are described in "The Merger Agreement—Agreement Not to Solicit Other Offers."

Termination of the Merger Agreement

        The merger agreement may be terminated in accordance with its terms prior to the Effective Time, whether before or after receipt of the Crosstex Stockholder Approval:

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by mutual written consent of Crosstex and Devon, in each case duly authorized by their respective boards of directors;



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by either Crosstex or Devon if:



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any governmental entity of competent jurisdiction has taken any action permanently restraining, enjoining or otherwise prohibiting the consummation of the mergers or the consummation of the Contribution Closing, and such law or other action has become final and nonappealable, provided that the terminating party has fulfilled its obligations with respect to seeking governmental approvals to complete the mergers;



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if the mergers have not been completed prior to June 30, 2014, which date may be extended from time to time by the written agreement of Crosstex and Devon (such date, as extended, the "End Date"); or



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if the special meeting (or any adjournment or postponement thereof) has concluded and the Crosstex Stockholder Approval has not been obtained upon a vote held at such meeting;



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by Crosstex if:



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any of the representations or warranties of the Devon Parties was or becomes inaccurate or any breach by any Devon Party of any covenant or other agreement of such parties contained in the merger agreement occurs and such inaccuracy or breach (i) would result in the failure of a closing condition and (ii) is not curable, or, if curable has not been cured prior to the earlier of the business day prior to the End Date or 60 days after notice of such inaccuracy or breach is provided to Devon by Crosstex, provided that Crosstex is not then in breach of any of its representations, warranties or covenants described in the merger agreement as would result in the failure of certain specified closing conditions; or



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at any time prior to receipt of the Crosstex Stockholder Approval, in order to enter into a definitive written agreement with respect to a Superior Proposal (which definitive written agreement shall be entered into concurrently with or promptly following the termination of the merger agreement), provided that Crosstex has complied with its non-solicitation obligations described above and the Crosstex Board's obligation to recommend the merger

 

agreement as described above, and that Crosstex has paid any applicable termination fees and expenses as required by the merger agreement;

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by Devon if:



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any of the representations or warranties of Crosstex was or becomes inaccurate or any breach by Crosstex of any covenant or other agreement of Crosstex contained in the merger agreement occurs and such inaccuracy or breach (i) would result in the failure of a closing condition and (ii) is not curable, or, if curable has not been cured prior to the earlier of the business day prior to the End Date or 60 days after notice of such inaccuracy or breach is provided by Devon to Crosstex, provided that Devon is not then in breach of any of its representations, warranties or covenants described in the merger agreement as would result in the failure of certain specified closing conditions;



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a Crosstex Recommendation Change occurs;



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Crosstex materially breaches its non-solicitation obligations under the merger agreement;



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Crosstex materially breaches its obligations with respect to the Crosstex Recommendation or holding the special meeting; or



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Crosstex or the Crosstex Board publicly announces, resolves or proposes to do any of the foregoing three items, whether or not permitted under Crosstex's non-solicitation obligations.

Finally, if the contribution agreement is terminated in accordance with its terms, the merger agreement will automatically, and without action by any party, terminate as of the date of the termination of the contribution agreement.

Termination Fees and Expenses Payable by Crosstex

        The merger agreement requires Crosstex to pay Devon a termination fee equal to $33.0 million (the "Termination Fee") if:

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Devon terminates the merger agreement because a Crosstex Recommendation Change has occurred;



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Devon terminates the merger agreement because Crosstex has materially breached its non-solicitation obligations under the merger agreement;



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Devon terminates the merger agreement because Crosstex has materially breached its obligation with respect to making the Crosstex Recommendation or holding the special meeting pursuant to the merger agreement;



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Devon terminates the merger agreement because Crosstex or the Crosstex Board has publicly announced, resolved or proposed to do any of the foregoing, whether or not permitted under Crosstex's non-solicitation obligations; or



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Crosstex terminates the merger agreement, at any time prior to receipt of the Crosstex Stockholder Approval, in order to enter into a definitive written agreement with respect to a Superior Proposal.

        In addition to the Termination Fee payable if Devon terminates the merger agreement in the foregoing circumstances, Crosstex has also agreed to reimburse Devon's reasonable out-of-pocket expenses (not to exceed $5.0 million) incurred in connection with the transactions contemplated by the merger agreement (the "Devon Expenses"). However, Crosstex will have no obligation to pay the Devon Expenses if Crosstex terminates the merger agreement in order to enter into a definitive written agreement with respect to a Superior Proposal within 45 days after the Execution Date.

 

        If either Devon or Crosstex terminates the merger agreement because the special meeting (or any adjournment or postponement thereof) has concluded without obtaining the Crosstex Stockholder Approval, Crosstex has agreed to pay to Devon the Devon Expenses.

        Crosstex has also agreed to pay to Devon the Termination Fee and Devon Expenses (to the extent not previously paid) in the event that (i) either Devon or Crosstex terminates because the special meeting (or any adjournment or postponement thereof) has concluded without obtaining the Crosstex Stockholder Approval and (A) an Acquisition Proposal made on or after the Execution Date was publicly announced, publicly disclosed or otherwise publicly made known prior to the special meeting and (B) within 12 months after the termination, Crosstex enters into a definitive agreement with respect to an Acquisition Proposal or (ii) Devon terminates because of a breach by Crosstex of its representations, warranties or covenants that would result in the failure of a closing condition and such breach has not been cured prior to the earlier of the business day prior to the End Date or 60 days after notice thereof and (X) an Acquisition Proposal was made for Crosstex on or after the Execution Date and prior to such termination (regardless of whether such Acquisition Proposal was publicly announced, publicly disclosed or otherwise publicly made known) and (Y) within 12 months after the termination, Crosstex enters into a definitive agreement with respect to an Acquisition Proposal.

Accounting Treatment

        In accordance with accounting principles generally accepted in the United States ("GAAP"), EnLink Midstream will account for the mergers using the acquisition method of accounting for business combinations. Under the acquisition method of accounting, Midstream Holdings will be the acquirer in the mergers because its parent company, Devon, obtains control of EnLink Midstream after the mergers. Consequently, Midstream Holdings' assets and liabilities will retain their carrying values. Additionally, the Crosstex assets acquired and liabilities assumed by EnLink Midstream, as well as EnLink Midstream's non-controlling interests in the Partnership, will be recorded at their fair values measured as of the acquisition date. Any excess of the purchase price over the estimated fair values of Crosstex's net assets acquired will be recorded as goodwill.

Material U.S. Federal Income Tax Consequences of the Mergers

        Tax matters associated with the mergers are complicated. The U.S. federal income tax consequences of the Crosstex merger to a Crosstex stockholder will depend on such stockholder's own personal tax situation. The tax discussions in this proxy statement/prospectus focus on the U.S. federal income tax consequences generally applicable to individuals who are residents or citizens of the United States that hold their shares of Crosstex common stock as capital assets, and these discussions have only limited application to other stockholders, including those subject to special tax treatment. Crosstex stockholders are urged to consult their tax advisors for a full understanding of the U.S. federal, state, local and foreign tax consequences of the Crosstex merger that will be applicable to them. Crosstex expects to receive an opinion from Baker Botts to the effect that (i) no gain or loss will be recognized by Crosstex stockholders as a result of the mergers, except to the extent of the cash portion of the Crosstex Merger Consideration received by them in the Crosstex merger and (ii) none of New Acacia, Crosstex or EnLink Midstream will recognize any gain or loss as a result of the mergers. Opinions of counsel, however, are subject to certain limitations and are not binding on the Internal Revenue Service ("IRS") and no assurance can be given that the IRS would not successfully assert a contrary position regarding the mergers and the opinions of counsel.

        The U.S. federal income tax consequences described above may not apply to some stockholders of Crosstex. Please read "Material U.S. Federal Income Tax Consequences of the Mergers" beginning on page 181 for a more complete discussion of the U.S. federal income tax consequences of the mergers.

 

Impact of the Transactions on the Partnership's Indebtedness

        The Closing will trigger an event of default under the Partnership's existing credit facility, unless the Partnership amends the credit facility or obtains a waiver of the applicable provisions in the credit facility from the applicable counterparties and lenders under such credit facility. The Partnership expects to amend such provisions or obtain such a waiver prior to the Closing. If the Partnership is unable to negotiate such an amendment or waiver of the applicable provisions in the credit facility, the counterparties may exercise their rights and remedies under the credit facility, including the termination of the commitments of the lenders and the acceleration of all outstanding indebtedness under the credit facility. Even if the Partnership is able to negotiate such an amendment or waiver, the lenders under the Partnership's credit facility may require a fee for such waiver or seek to renegotiate the credit agreement on less favorable terms. Further, during the pendency of the proposed transactions, a decrease in Devon's perceived creditworthiness may have an adverse effect on the Partnership's perceived creditworthiness, possibly resulting in a downgrade of credit ratings, tightening of credit under the Partnership's existing credit facility or an increase in the Partnership's borrowing costs.

        In addition, the Closing will trigger a mandatory repurchase offer under the indenture governing the Partnership's 8.875% senior notes due 2018 (the "2018 Notes"). Also, the Closing could trigger a mandatory repurchase offer under the indenture governing the Partnership's 7.125% senior notes due 2022 (the "2022 Notes") in the event of a decrease in the rating of the 2022 Notes within 90 days following the Closing Date. The Partnership expects to fulfill its obligations with respect to the mandatory repurchase offer of the 2018 Notes and, if necessary, the 2022 Notes, following the Closing in accordance with the terms of the applicable indenture. If the Partnership is unable to fund a repurchase of the 2018 Notes and, if necessary, the 2022 Notes, the counterparties may exercise their rights and remedies under the applicable indenture.

Comparison of Rights of EnLink Midstream Unitholders and Crosstex Stockholders

        The rights of Crosstex stockholders are currently governed by Crosstex's amended and restated certificate of incorporation, fourth amended and restated bylaws and the DGCL. Crosstex stockholders who receive the Crosstex Merger Consideration will become unitholders of EnLink Midstream upon completion of the Crosstex merger. Thereafter, their rights will be governed by EnLink Midstream's operating agreement, as amended and restated, and the Delaware Limited Liability Company Act (the "DLLCA"). As a result, these Crosstex stockholders will have different rights once they become unitholders of EnLink Midstream due to the differences in the governing documents of, and laws applicable to, EnLink Midstream and Crosstex. The key differences are described in the section titled "Comparison of Rights of EnLink Midstream Unitholders and Crosstex Stockholders" beginning on page 218.

Selected Combined Historical Financial Data of EnLink Midstream Holdings, LP Predecessor

        The following table presents the selected historical financial and operating data of EnLink Midstream Holdings, LP Predecessor (the "Predecessor"), whose assets comprise the Midstream Business, for the periods indicated. The selected combined historical financial data of the Predecessor are derived from the historical combined financial statements of the Predecessor and should be read together with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and its audited combined financial statements for the year ended December 31, 2012 and its unaudited combined financial statements and notes thereto for the nine months ended September 30, 2013, each of which are in Annex A to this proxy statement/prospectus. The following

 

information is only a summary and is not necessarily indicative of the results or future operations of the Predecessor.

		Nine Months Ended September 30,						Year Ended December 31,
		2013			2012			2012			2011			2010			2009			2008
		(unaudited)															(unaudited)
		(In millions, except per unit and operating data)
Key Performance Measure
Operating margin(1)		$	330.4		$	267.8		$	365.3		$	453.8		$	427.6		$	366.8		$	559.2
Operating Data
Throughput (thousands of MMBtu/d)			2,717.0			2,704.6			2,720.6			2,637.4			2,470.0			2,294.2			2,146.1
NGL production (MBbls/d)			85.6			68.2			71.0			69.7			62.1			59.3			51.5
Statement of Income Data
Operating revenues		$	1,764.1		$	1,442.6		$	2,000.8		$	2,623.4		$	2,016.0		$	1,609.1		$	2,709.7
Operating expenses			(1,630.7	)		(1,352.1	)		(1,899.2	)		(2,311.8	)		(1,766.9	)		(1,436.7	)		(2,315.1	)
Operating income			133.4			90.5			101.6			311.6			249.1			172.4			394.6
Income (loss) from equity investment			10.2			(0.2	)		2.0			9.3			5.1			5.0			3.7
Income tax expense			(51.7	)		(32.5	)		(37.3	)		(115.5	)		(91.5	)		(63.8	)		(143.4	)
Net income from continuing operations			91.9			57.8			66.3			205.4			162.7			113.6			254.9
Net income from discontinued operations			0.6			10.2			9.5			10.7			16.0			11.6			28.0
Net income		$	92.5		$	68.0		$	75.8		$	216.1		$	178.7		$	125.2		$	282.9
Balance Sheet Data
Net property, plant and equipment		$	1,868.4		$	1,804.0		$	1,843.2		$	1,687.0		$	1,574.6		$	1,499.2		$	1,362.3
Total assets		$	2,355.7		$	2,505.3		$	2,535.2		$	2,446.3		$	2,336.0		$	2,276.6		$	2,130.0
Total long-term liabilities		$	460.2		$	452.6		$	449.8		$	461.0		$	418.0		$	318.1		$	271.5
Total equity		$	1,842.3		$	1,978.3		$	2,002.0		$	1,901.3		$	1,849.0		$	1,869.7		$	1,750.3
Cash Flow Data
Net cash flows provided by (used in):
Operating activities		$	256.3		$	173.2		$	254.4		$	401.2		$	391.5
Investing activities		$	(202.7	)	$	(264.8	)	$	(368.5	)	$	(268.6	)	$	(220.4	)
Financing activities		$	(53.6	)	$	91.6		$	114.1		$	(132.6	)	$	(171.1	)

---

(1)

Operating margin is a non-GAAP financial measure. See below for additional information and a reconciliation of operating margin to operating income, which is its most directly comparable GAAP financial measure.

Predecessor Non-GAAP Financial Measure

        The selected combined historical financial data of the Predecessor included in this proxy statement/prospectus includes operating margin, a non-GAAP financial measure.

        The Predecessor's operating margin is defined as operating revenues less product purchases and operations and maintenance expenses. The Predecessor uses operating margin as a performance measure of the core profitability of its operations. As an indicator of the Predecessor's operating performance, operating margin should not be considered an alternative to, or more meaningful than, operating income or net income as determined in accordance with GAAP. The Predecessor's operating margin may not be comparable to similarly titled measures of other companies because other entities may not calculate these amounts in the same manner.

 

        The following table provides a reconciliation of the Predecessor's operating margin to operating income, which is the most directly comparable GAAP financial measure:

		Nine Months Ended September 30,						Year Ended December 31,
		2013			2012			2012			2011			2010			2009			2008
		(in millions)
Predecessor's operating margin		$	330.4		$	267.8		$	365.3		$	453.8		$	427.6		$	366.8		$	559.2
Add (deduct):
Depreciation and amortization			(147.1	)		(117.8	)		(159.8	)		(144.8	)		(124.9	)		(136.6	)		(116.4	)
General and administrative			(33.7	)		(31.2	)		(43.6	)		(40.1	)		(39.4	)		(44.8	)		(38.6	)
Non-income taxes			(13.0	)		(9.7	)		(13.2	)		(15.3	)		(13.8	)		(12.5	)		(9.4	)
Asset impairments			(2.5	)		(22.0	)		(50.1	)		—			—			—			—
Other, net			(0.7	)		3.4			3.0			58.0			(0.4	)		(0.5	)		(0.2	)
Operating income		$	133.4		$	90.5		$	101.6		$	311.6		$	249.1		$	172.4		$	394.6

Selected Consolidated Historical Financial Data of Crosstex

        The following table sets forth selected historical financial and operating data of Crosstex as of and for the dates and periods indicated. Financial and operating data related to the acquisition of Crosstex's Ohio River Valley assets is included for the nine months ended September 30, 2013 and 2012 and year ended December 31, 2012. The selected historical financial data are derived from the consolidated financial statements of Crosstex and should be read together with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and its audited consolidated financial statements and notes thereto in Crosstex's Annual Report on Form 10-K for year ended December 31, 2012 and its unaudited consolidated financial statements and notes thereto in Crosstex's Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, which are incorporated by

 

reference in this document. The following information is only a summary and is not necessarily indicative of the results of future operations of Crosstex.