Western Refining Logistics (WNRL) to Acquire Assets from Northern Tier Energy Subsidiary
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In a joint statement today, Western Refining, Inc. (NYSE: WNR) and Western Refining Logistics, LP (NYSE: WNRL) announced that WNRL has entered into an agreement with WNR and St. Paul Park Refining Co. LLC (“SPPR”), a wholly-owned subsidiary of Northern Tier Energy LLC and indirect wholly-owned subsidiary of WNR, to acquire certain terminalling, storage and other logistics assets for total consideration of $210 million, comprised of $195 million in cash and $15 million of WNRL common units issued to SPPR. WNRL expects to fund the acquisition with a combination of proceeds from a public equity offering and revolver borrowings. The transaction is expected to close on or about September 15, 2016.
“The acquisition of fee-based logistics assets related to the St. Paul Park refinery is consistent with WNRL’s strategic plan by providing exposure to an additional crude oil basin in the Bakken, diversifying WNRL’s operations and allowing for further growth,” said Jeff Stevens, CEO of both WNR and WNRL. Stevens added, “This acquisition will contribute to our 15% annual distribution growth guidance through 2018.”
The logistics assets to be acquired by WNRL include approximately four million barrels of refined product and crude oil storage tanks, a light products terminal, a heavy products loading rack, certain rail and barge facilities, certain other related logistics assets, and two crude oil pipeline segments and one pipeline segment not currently in service, each of which is approximately 2.5 miles and extends from SPPR’s refinery in St. Paul Park, Minnesota to SPPR’s tank farm in Cottage Grove, Minnesota. They are expected to generate 2016 estimated operating income of $16 million and EBITDA of $24.7 million. Upon closing, SPPR and a subsidiary of WNRL plan to enter into a 10-year terminalling, transportation and storage services agreement (the “Terminalling Agreement”) containing certain minimum volume commitments by SPPR. Pursuant to the Terminalling Agreement, a subsidiary of WNRL will provide product storage services, product throughput services, and product additive and blending services at or near SPPR’s refinery located in St. Paul Park, Minnesota.
The terms of the transaction were approved by WNR’s Board of Directors and the Conflicts Committee of the Board of Directors of the general partner of WNRL which is composed entirely of independent directors.
Separately, WNRL announced the successful syndication of a $200 million increase in its revolving credit facility to $500 million. The increase is contingent on the execution of definitive documentation relating to both the increase and the corresponding amendment to the revolving credit facility and customary closing conditions. Wells Fargo Securities, LLC, Suntrust Robinson Humphrey, Inc. and Credit Agricole Corporate and Investment Bank acted as Joint Lead Arrangers.
“The increase in the WNRL revolver, in conjunction with the equity offering that will partially fund the asset acquisition, provides WNRL with significant liquidity and financial flexibility. We are well positioned to continue to execute WNRL’s growth strategy,” concluded Mr. Stevens.
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Create E-mail Alert Related CategoriesCorporate News, Management Comments, Mergers and Acquisitions
Related EntitiesSunTrust Robinson Humphrey, Bakken Formation, Crude Oil, Credit Agricole, Earnings, Wells Fargo, Definitive Agreement, Equity Offerings
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