Buckeye Partners (BPL) Enters Agreement to Acquire 50% Stake in VTTI B.V. for $1.15B

October 24, 2016 4:14 PM EDT

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Buckeye Partners, L.P. (NYSE: BPL) announced that it has signed a definitive agreement to acquire a 50 percent equity interest in VTTI B.V. (“VTTI”), a company that will be jointly owned with Vitol1 for $1.15 billion. VTTI is one of the largest independent global marine terminal businesses that, through its subsidiaries and partnership interests, owns and operates approximately 54 million barrels2 of petroleum products storage across 13 terminals located on five continents. These marine terminals are predominately located in key global energy hubs—including Northwest Europe, the United Arab Emirates and Singapore—and offer world-class storage and marine terminalling services for refined products, liquid petroleum gas and crude oil. A majority of VTTI’s cash flows are supported by take-or-pay storage agreements with Vitol, the largest crude oil and petroleum products trading company in the world. This transaction, which is subject to regulatory approvals and customary closing conditions, is expected to close in early January 2017.

“This investment in VTTI provides immediate access to a stable portfolio of international terminalling and storage assets, as well as an established platform to participate in further attractive growth opportunities across the globe,” stated Clark C. Smith, Chairman, President and Chief Executive Officer. “The interest we are acquiring in VTTI fits well into our growth strategy of investing in terminal assets in strategic energy hubs while further enhancing the logistical solutions available to our customer base across key energy markets. We expect this investment to generate increasing quarterly distributions supported by stable fee-based cash flows. These cash flows are underpinned by commercial agreements with credit worthy customers, anchored by Vitol. We expect this transaction to be immediately accretive to our distributable cash flow per limited partner unit in 2017 with significant accretion growth expected over time.”

Buckeye and Vitol will have equal Board representation and voting rights in VTTI following the closing of the transaction. VTTI will continue to operate as a stand-alone entity and its existing management team and employees will remain in place to operate the assets. “We have been very impressed with the experience and talent of the VTTI senior leadership team and the culture they have developed across VTTI’s global employee base,” continued Mr. Smith. “We are confident VTTI’s unwavering focus on environmental compliance and safety, as well as customer service, positions Buckeye and VTTI for continued growth and success in the future.”

Barclays Capital Inc. acted as the exclusive financial advisor to Buckeye and provided a fairness opinion to the Board of Directors of Buckeye GP LLC, the general partner of Buckeye, in connection with this transaction.

A presentation concerning this transaction is available on the “Investor Center” section of Buckeye’s website, www.buckeye.com.

Buckeye will host a conference call to discuss third quarter results and the VTTI transaction with members of executive management tomorrow, October 25, 2016, at 11:00 a.m. Eastern Time. The call can be accessed through the internet at http://edge.media-server.com/m/p/32jmsuh9 or by dialing 877-870-9226 and entering access code 93504418 ten minutes prior to the scheduled start time. A replay will be available on the internet at http://edge.media-server.com/m/p/32jmsuh9 until November 25, 2016 or by dialing 800-585-8367 and entering access code 93504418.

___________________________1 Vitol’s share will be owned by Vitol and also through Vitol Investment Partnership (“VIP”), an investment vehicle sponsored and managed by Vitol.2 Includes 0.8 million barrels currently under development in Cape Town, Africa expected to be placed into service 1st half of 2017



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