Valero Energy Partners (VLP) Acquires Meraux and Three Rivers Terminal Services Business in $325M Deal
- Wall St. edges higher, supported by banks, telecoms
- Equinix (EQIX) Announces $3.6B Acquisition of Data Center Portfolio from Verzion (VZ)
- Deal Progress Said to Slow as Johnson & Johnson (JNJ) Puts Actelion (ALIOY) Under Microscope - Source
- Trump Wants to Cancel New Air Force One Order with Boeing (BA)
- Roper Industries (ROP) to acquire Deltek in $2.8B Deal
Get inside Wall Street with StreetInsider Premium. Claim your 2-week free trial here.
Valero Energy Partners LP (NYSE: VLP) announced that the board of directors of its general partner has approved the Partnership’s acquisition of the Meraux and Three Rivers Terminal Services Business from a subsidiary of Valero Energy Corporation (NYSE: VLO) (Valero) for total consideration of approximately $325 million. In its first twelve months of operation, the business to be acquired is expected to contribute approximately $25 million of net income and approximately $39 million of earnings before interest, taxes, depreciation, and amortization (EBITDA). The transaction is expected to close effective September 1, 2016.
“With this next step in our growth strategy, we’re expanding our U.S. Gulf Coast footprint and achieving our acquisition target for the year,” said Joe Gorder, Chief Executive Officer of VLP’s general partner. “With solid operations, a strong balance sheet, and our supportive sponsor, we remain well-positioned to deliver annual distribution growth of 25 percent for 2016 and 2017.”
The business to be acquired includes terminals that support Valero’s Meraux and Three Rivers refineries. The Meraux assets consist of 24 tanks with 3.9 million barrels of storage capacity for crude oil, intermediates, and refined petroleum products. The Three Rivers assets consist of 62 tanks with 2.25 million barrels of storage capacity for crude oil, intermediates, and refined petroleum products.
The Partnership expects to finance the $325 million acquisition with borrowings under its revolving credit facility, cash on hand, and the issuance of additional common units and general partner units to Valero subsidiaries. The newly issued units will be allocated in a proportion allowing the general partner to maintain its 2 percent general partner interest.
Upon closing, the Partnership plans to enter into 10-year terminaling agreements with a subsidiary of Valero. The agreements are expected to include minimum volume commitments covering approximately 85 percent of planned throughput.
The terms of the transaction were approved, subject to the execution of definitive documentation, by the board of directors of the general partner, following the approval and recommendation of the board’s conflicts committee. The conflicts committee is composed of independent directors and was advised by Evercore Group L.L.C., its financial advisor, and Akin Gump Straus Hauer & Feld LLP, its legal counsel.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- AutoZone (AZO) Tops Q1 EPS by 5c; Comps Light of Views
- Corning (GLW) Announces Equity Investment in Menlo Micro
- Microsoft (MSFT) and LinkedIn's (LNKD) Proposed Merger Cleared in Europe, with Conditions
Create E-mail Alert Related CategoriesCorporate News, Management Comments, Mergers and Acquisitions
Related EntitiesCrude Oil, Earnings, Definitive Agreement
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!