HF Sinclair Corporation and Holly Energy Partners, L.P. Announce Definitive Merger Agreement
08.17.2023 By Tank Terminals - NEWS

August 17, 2023 [Holly Energy Partners, L.P.]- HF Sinclair Corporation (NYSE: DINO) (“HF Sinclair”) and Holly Energy Partners, L.P. (“HEP” or the “Partnership”) (NYSE: HEP) announced today that they have entered into a definitive merger agreement for HF Sinclair to acquire all of the outstanding common units (“Common Units”) of HEP not owned by HF Sinclair or its aliates in exchange for a combination of common stock, par value $0.01 per share, of HF Sinclair (“Common Stock”) and cash.


The agreement provides for consideration of both stock and cash in which each holder of Common Units would receive a combination of 0.315 shares of Common Stock and $4.00 in cash, without interest, for each publicly held Common Unit (the “Proposed Transaction”). The Proposed Transaction consideration represents an approximate 2% premium to the closing price of HEP’s Common Units as of August 15, 2023.

HF Sinclair’s Chief Executive Ocer and President, Tim Go, commented, “We are pleased to announce this strategic transaction which we believe simplies our corporate structure, reduces costs and further supports the integration and optimization of our portfolio. We expect the transaction to be accretive to earnings per share and available free cash ow within the rst twelve months, further supporting our capital allocation strategy of returning excess cash to shareholders.”

Upon closing of the Proposed Transaction, the Partnership will be a wholly owned subsidiary of HF Sinclair and will no longer be a publicly traded partnership.

The Proposed Transaction is expected to close in the fourth quarter of 2023, subject to the approval of HF Sinclair stockholders and HEP unitholders and the satisfaction of certain customary closing conditions.

Barclays is acting as nancial advisor to HF Sinclair, and Vinson & Elkins L.L.P. and Richards, Layton & Finger, P.A. are acting as HF Sinclair’s legal advisors. Intrepid Partners, LLC is acting as nancial advisor to the conicts committee of the board of the ultimate general partner of the Partnership (the “Conicts Committee”), and Gibson, Dunn & Crutcher LLP and Morris, Nichols, Arsht & Tunnell LLP are acting as the Conicts Committee’s legal advisors.

Cautionary Statement Regarding Forward-Looking Statements:

The statements in this press release relating to matters that are not historical facts are “forward-looking statements” based on management’s beliefs and assumptions using currently available information and expectations as of the date hereof, are not guarantees of future performance and involve certain risks and uncertainties, including those contained in HF Sinclair’s and HEP’s lings with the Securities and Exchange Commission (the “SEC”). Forward-looking statements use words such as “anticipate,” “project,” “will,” “expect,” “plan,” “goal,” “forecast,” “strategy,” “intend,” “should,” “would,” “could,” “believe,” “may,” and similar expressions and statements regarding HF Sinclair’s and HEP’s plans and objectives for future operations or the Proposed Transaction. Although we believe that the expectations reected in these forward-looking statements are reasonable, we cannot assure you that HF Sinclair’s and HEP’s expectations will prove correct. Therefore, actual outcomes and results could materially dier from what is expressed, implied or forecast in such statements. Any dierences could be caused by a number of factors, including, but not limited to, the ability of HF Sinclair or HEP to consummate the Proposed Transaction; the risk that the Proposed Transaction does not occur; negative eects from the pendency of the Proposed Transaction; failure to obtain the required approvals for the Proposed Transaction; the time required to consummate the Proposed Transaction; the focus of management time and attention on the Proposed Transaction and other disruptions arising from the Proposed Transaction; the ability of HF Sinclair to achieve the expected earnings per share and cash ow accretion and other expected benets from the Proposed Transaction; legal proceedings that may be instituted against HF Sinclair or HEP following the announcement of the Proposed Transaction; limitations on HF Sinclair’s ability to eectuate share repurchases due to market conditions and corporate, tax, regulatory and other considerations; HF Sinclair’s and HEP’s ability to successfully integrate the Sinclair Oil Corporation (now known as Sinclair Oil LLC) and Sinclair Transportation Company LLC businesses acquired from The Sinclair Companies (now known as REH Company) (collectively, the “Sinclair Transactions”) with their existing operations and fully realize the expected synergies of the Sinclair Transactions or on the expected timeline; HF Sinclair’s ability to successfully integrate the operation of the Puget Sound renery with its existing operations; the demand for and supply of crude oil and rened products, including uncertainty regarding the increasing societal expectations that companies address climate change; risks and uncertainties with respect to the actions of actual or potential competitive suppliers and transporters of refined petroleum products or lubricant and specialty products in HF Sinclair’s markets; the spread between market prices for rened products and market prices for crude oil; the possibility of constraints on the transportation of rened products or lubricant and specialty products; the possibility of ineciencies, curtailments or shutdowns in renery operations or pipelines, whether due to reductions in demand, accidents, unexpected leaks or spills, unscheduled shutdowns, infection in the workforce, weather events, global health events, civil unrest, expropriation of assets, and other economic, diplomatic, legislative, or political events or developments, terrorism, cyberattacks, or other catastrophes or disruptions aecting HF Sinclair’s and/or HEP’s operations, production facilities, machinery, pipelines and other logistics assets, equipment, or information systems, or any of the foregoing of HF Sinclair’s and/or HEP’s suppliers, customers, or third-party providers, and any potential asset impairments resulting from, or the failure to have adequate insurance coverage for or receive insurance recoveries from, such actions; the eects of current and/or future governmental and environmental regulations and policies, including increases in interest rates; the availability and cost of nancing to HF Sinclair; the eectiveness of HF Sinclair’s capital investments and marketing strategies; HF Sinclair’s and HEP’s eciency in carrying out and consummating construction projects, including HF Sinclair’s ability to complete announced capital projects on time and within capital guidance; HF Sinclair’s and HEP’s ability to timely obtain or maintain permits, including those necessary for operations or capital projects; the ability of HF Sinclair to acquire rened or lubricant product operations or pipeline and terminal operations on acceptable terms and to integrate any existing or future acquired operations; the possibility of terrorist or cyberattacks and the consequences of any such attacks; uncertainty regarding the eects and duration of global hostilities, including the Russia-Ukraine war, and any associated military campaigns which may disrupt crude oil supplies and markets for HF Sinclair’s rened products and create instability in the nancial markets that could restrict HF Sinclair’s ability to raise capital; general economic conditions, including economic slowdowns caused by a local or national recession or other adverse economic condition, such as periods of increased or prolonged ination; and other nancial, operational and legal risks and uncertainties detailed from time to time in HF Sinclair’s and HEP’s SEC lings, and those risks that will be described in the registration statement on Form S-4 and accompanying prospectus available from the sources indicated below, whether or not related to the Proposed Transaction. These risks, as well as other risks associated with the Proposed Transaction, will be more fully discussed in the proxy statement/prospectus that will be included in the registration statement on Form S-4 that will be led with the SEC in connection with the Proposed Transaction. The forward-looking statements speak only as of the date made and, other than as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.


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