Global Partners (GLP) to Acquire Alliance Energy in $296M Deal
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Global Partners LP (NYSE: GLP) has signed a definitive agreement to acquire 100 percent of the membership interests of Alliance Energy LLC (“Alliance”). In consideration, Global Partners will issue 5,850,000 limited partner units to Alliance’s owners and assume long-term debt of approximately $180 million. Based on Global Partners’ November 18 closing price of $19.89 per unit, the transaction has an enterprise value of approximately $296 million.
The transaction is expected to be accretive in the first full year of operation. Based on the approximate $296 million value of the transaction and based on the current operating and anticipated performance of the Alliance business, as well as current and anticipated general economic, industry and market conditions, the Partnership has modeled an expected cash return, prior to financing costs, in the low-to-mid-teens in the first full year of operation.
The terms of the transaction were unanimously approved by the Board of Directors of Global GP LLC, based on the unanimous approval and recommendation of the Board’s conflicts committee, which is composed entirely of independent directors. The conflicts committee engaged Evercore Partners to act as its financial advisor and Richards, Layton & Finger, P.A. to act as its legal advisor.
The closing of the transaction is subject to the satisfaction of a number of conditions, including but not limited to the expiration of the termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Subject to the satisfaction of the conditions in the definitive agreement, the Partnership anticipates that the closing of this transaction will occur in Q112.
The transaction is expected to be accretive in the first full year of operation. Based on the approximate $296 million value of the transaction and based on the current operating and anticipated performance of the Alliance business, as well as current and anticipated general economic, industry and market conditions, the Partnership has modeled an expected cash return, prior to financing costs, in the low-to-mid-teens in the first full year of operation.
The terms of the transaction were unanimously approved by the Board of Directors of Global GP LLC, based on the unanimous approval and recommendation of the Board’s conflicts committee, which is composed entirely of independent directors. The conflicts committee engaged Evercore Partners to act as its financial advisor and Richards, Layton & Finger, P.A. to act as its legal advisor.
The closing of the transaction is subject to the satisfaction of a number of conditions, including but not limited to the expiration of the termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Subject to the satisfaction of the conditions in the definitive agreement, the Partnership anticipates that the closing of this transaction will occur in Q112.
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