Courtesy of Benzinga.
Valero Energy Partners LP (NYSE: VLP) announced Friday that it will purchase certain businesses from subsidiaries of Valero Energy Corporation (NYSE: VLO).
According to a press release, the Partnership will purchase the outstanding membership interests in Valero Partners Houston, LLC and Valero Partners Louisiana, LLC for total consideration of about $671 million. The assets purchased consist of a combined 13.6 million barrels of storage capacity.
Joe Gorder, chairman, president and CEO at the Partnership said, "this acquisition is our largest yet and is consistent with our previously communicated accelerated growth strategy."
Upon closing of the deal, the Partnership plans to enter into 10-year terminaling agreements with both Valero Energy subsidiaries. Moreover, it expects the acquired businesses to contribute approximately $75 million of EBITDA in their first full year of operation.
According to the press release, the Partnership expects to finance the purchase with $211 million of cash, $200 million of borrowings under its revolving credit facility, $160 million in borrowings under a five-year subordinated loan agreement with Valero Energy, "and the issuance of 1,908,100 common units, representing limited partner interests, and 38,941 general partner units to a subsidiary of Valero Energy valued, collectively, at $100 million. The newly issued VLP units will be allocated between common units and general partner units in a proportion allowing the general partner to maintain its 2 percent general partner interest."
Posted-In: Valero Partners Houston Valero Partners Louisiana Valero TerminalingNews M&A
