Delek US Holdings (DK) to Sell MAPCO Express to COPEC for $535M
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Delek US Holdings, Inc. (NYSE: DK) announced that it has entered into a definitive agreement with Compañía de Petróleos de Chile COPEC S.A. pursuant to which Delek will sell MAPCO Express, Inc., and certain related affiliated companies, to a U.S. subsidiary of COPEC for total cash consideration of $535 million plus MAPCO’s cash on hand at closing. This transaction is subject to customary closing conditions and is expected to close by year end.
Following a strategic review by Delek of options to unlock the value of its retail assets, which included a potential drop down to Delek Logistics Partners, LP (NYSE: DKL), Delek determined that the sale to COPEC was an efficient and prudent way to unlock value for Delek’s shareholders. Debt associated with the retail assets, which was approximately $160.0 million at June 30, 2016, will be repaid at closing. As part of this Transaction, Delek will continue to supply fuel to certain MAPCO retail locations under an 18-month supply agreement.
Uzi Yemin, Chairman, President and Chief Executive Officer of Delek, said, “We have unlocked the value of our retail assets through this transaction with COPEC. I want to thank the MAPCO team for their efforts in developing the MAPCO brand. The compelling valuation we were able to achieve is a direct result of their hard work. This transaction creates an exciting opportunity for MAPCO and its employees as it becomes a key component of COPEC’s U.S. growth strategy. Delek also gains a partner in retail fuel sales and will continue to supply locations through its wholesale business and space on the Colonial Pipeline system. As a result, our consolidated RINs position should not be significantly changed by this transaction. At June 30, 2016, we had approximately $377.0 million of cash, and the completion of this transaction should give us additional financial flexibility. This flexibility can be used to support Delek Logistics Partners as it explores growth opportunities, as well as continuing to evaluate strategic opportunities to create long term value for our shareholders.”
Delek’s exclusive financial advisor was RBC Capital Markets, LLC. COPEC’s financial advisor was Raymond James & Associates, Inc. and legal advisor was Simpson Thacher & Bartlett LLP.
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Create E-mail Alert Related CategoriesCorporate News, Hot Corp. News, Management Comments, Mergers and Acquisitions, Spinoffs
Related EntitiesRaymond James, RBC Capital, Crude Oil, OPEC, Earnings
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