Notable Mergers and Acquisitions 8/23: (VLP) (GPRE) (ALB) (ACN)
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“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.
*** Green Plains Inc. (Nasdaq: GPRE) announced that it was the successful bidder on three ethanol plants for sale by Abengoa Bioenergy conducted under the provisions of the U.S. Bankruptcy Code. The company will purchase the Madison, Ill., Mount Vernon, Ind. and York, Neb. ethanol facilities, with combined annual production capacity of 236 million gallons per year, for approximately $237 million in cash, plus certain working capital adjustments.
“We continue to focus on making strategic investments in high quality assets as we expand our production footprint,” said Todd Becker, president and chief executive officer at Green Plains. “The Madison and Mount Vernon plants will give us access to the Mississippi River, supporting our new export terminal planned in Beaumont, Texas. In addition, we will broaden our product offering globally with industrial alcohol production at the York plant. These acquisitions further our commitment to deliver long-term value for both Green Plains Inc. and Green Plains Partners shareholders.”
Upon completion of the acquisitions, Green Plains will own and operate 17 dry mill ethanol facilities with combined production capacity of nearly 1.5 billion gallons per year.
The company’s acquisition agreements are subject to review and approval by the U.S. Bankruptcy Court for the Eastern District of Missouri at a hearing currently scheduled for Aug. 29, 2016. The acquisitions are expected to be complete no later than Sept. 30, 2016, subject to regulatory approval and customary closing conditions, at which time the ethanol storage and transportation assets will be offered to Green Plains Partners.
*** Albemarle Corporation (NYSE: ALB) announced that it has signed a definitive agreement to acquire the lithium hydroxide and lithium carbonate conversion assets and supporting business functions currently operated by Jiangxi Jiangli New Materials Science and Technology Co. Ltd. ("Jiangli New Materials"). The transaction is expected to close by the end of the first quarter of 2017, subject to regulatory approvals and other customary closing conditions.
The transaction includes manufacturing assets located in both Jiangxi and Sichuan, China focused on the production of battery-grade lithium carbonate and lithium hydroxide. Jiangli New Materials currently tolls lithium hydroxide and lithium carbonate for Albemarle utilizing spodumene from Albemarle's Talison joint venture in Australia. Collectively, the Jiangli New Material assets have a total lithium salts capacity of 15,000 MT/year, with the ability to expand as needed to support Albemarle's growth strategy.
"We believe this transaction will further solidify Albemarle's leading position in the lithium industry, and accelerate our ability to meet our strategic goal of capturing 50% of the growth in the lithium industry," said David Klanecky, vice president of Albemarle's Lithium Division. "This transaction will enable us to supply premium lithium salts to an expanded global customer base."
"Jiangli has built a solid reputation on consistently manufacturing high-quality lithium salts," said Mr. Deng Zhiling, Chairman of Jiangli New Materials. "This transaction is an opportunity for Jiangli to create additional value for the lithium industry in Asia Pacific and abroad."
*** Accenture (NYSE: ACN) has entered into an agreement to acquire Redcore, a privately held Australia-based consulting company that specializes in providing identity and access management services (IAM), as well as security services for Cloud, network management, public key infrastructure, cyber defense, applications and the internet of things.
The acquisition is subject to customary closing conditions. Financial terms are not being disclosed.
As part of its offerings, Redcore develops holistic authentication, authorization and administration services across a range of cloud, web, mobile and adaptive access-management technologies. Redcore has deployed multiple large-scale cybersecurity solutions, including multi-factor authentication and secure application gateways that are used by some of the major Australian banks and government agencies.
“The acquisition of Redcore will allow us to expand our existing IAM services and security-as-a-Service capabilities – along with other critical cyber defense services – while also immediately extending our leadership position in the Asia-Pacific region,” said Kelly Bissell, managing director, Accenture Security. “Redcore has a team of seasoned security leaders who have exceptional security skills and industry knowledge. Together, we will be better positioned to tailor intelligent security services to organizations’ unique businesses and industries and deliver innovative solutions that help build business resilience from the inside out.”
Redcore, with its headquarters in Melbourne, Australia, provides security services and IT service management for a wide range of clients, including government agencies and companies across the finance, health, retail and telecommunications industries. Founded in 2010, Redcore has multiple offices in Australia, India, New Zealand, the Philippines and Singapore and has approximately 130 security professionals.
Joseph Failla, co-founder, Redcore, said, “We are excited to become part of Accenture Security and to bring our proven deep, highly-specialized skills and services to strengthen Accenture’s IAM and other cybersecurity offerings. We are very proud of Redcore’s wonderful team and our achievements, and we now look forward to creating an unrivalled combined cybersecurity team and launching capabilities that will change the market. With Accenture’s extensive global security resources, its methodologies and its interdisciplinary security ecosystem of innovators from across the world, we will be able to rapidly advance Redcore’s capabilities and innovate leading-edge solutions for clients, as well as provide excellent opportunities and career paths for our employees."
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