The acquisition, which is expected to close by the end of the fourth quarter, is expected to be immediately accretive to NuStar’s earnings based on the terminal’s current, actual volumes.

It also reflects an approximate seven times multiple based on the forecast four-year average earnings before interest, taxes, depreciation and amortization (EBITDA) attributable to the assets of $13.5 million annually.

When combined with NuStar’s existing terminal operations in Corpus Christi, the acquisition will give NuStar over 3.6 million bbl of total storage in the Port of Corpus Christi, including 3.1 million bbl of crude oil storage and 577,000 bbl of refined product storage.

The terminal NuStar is acquiring includes 1.15 million bbl of total storage, which comprises 900,000 bbl of crude oil storage and 250,000 bbl of refined product storage.

The terminal has direct connectivity to Eagle Ford crude oil production and receives crude oil and condensate via its connection to the Harvest Pipeline and through its six-bay truck rack. The terminal has access to two of the port’s deep-water crude oil docks, including exclusive use of the port’s new crude oil dock, and a barge dock. The terminal is on 25 acres and has room for further expansion.

NuStar also expects to achieve significant operational synergies between its existing North Beach Terminal and the Martin terminal, which are located adjacent to each other in the Port of Corpus Christi.

“Corpus Christi has been a strategic hub for NuStar for many years, and we are very pleased to make this acquisition that will not only solidify our presence there, but also give us the ability to serve a new pipeline and new customers, and provide us greater connectivity to domestic and international crude oil and refined products markets,” said NuStar President and CEO Brad Barron.

Martin Midstream CEO Ruben Martin said, “This sale of assets is a significant positive event for the partnership and a necessary first step to ultimately returning MMLP to a growth trajectory.”

Although these assets have historically performed well for the company, they are not critical to its success moving forward, Martin said. 

“Given our focus on reduction of leverage, we feel this asset sale and distribution right-sizing are prudent moves for the Partnership at this time. Together, these two actions should provide a sound catalyst to reducing our currently elevated cost of capital by delivering and improving increased distribution coverage to our unitholders,” he added.

Looking ahead, Martin anticipates “that these efforts will improve the balance sheet and result in estimated distribution coverage of at least 1.20 times in 2017 and 2018.”

NuStar, a publicly traded master limited partnership based in San Antonio, is one of the largest independent liquids terminal and pipeline operators in the nation. NuStar has about 8,700 miles of pipeline and 79 terminal and storage facilities that store and distribute crude oil, refined products and specialty liquids.

The partnership’s combined system has about 94 million bbl of storage capacity. NuStar has operations in the United States, Canada, Mexico, the Netherlands, including St. Eustatius in the Caribbean, and the United Kingdom.

Martin Midstream is a publicly traded limited partnership with a diverse set of operations focused primarily in the U.S. Gulf Coast region. Its primary business segments include terminaling, storage and packaging services for petroleum products and by-products; natural gas services, including liquids transportation and distribution services and natural gas storage; sulfur and sulfur-based products processing, manufacturing, marketing and distribution; and marine transportation services for petroleum products and by-products.