January 25, 2017 [OPIS] - Sprague Resources has inked a definitive agreement to buy the Springfield, Mass., refined products terminal from L.E. Belcher for approximately $20 million in cash.
The transaction includes two pipeline-supplied distillate terminals and a storage facility with combined capacity of 295,000 bbl. L.E. Belcher’s wholesale and commercial fuels business are also part of the deal.
A closing is expected within 30 days.
Sprague has previously supplied the L.E. Belcher terminals and is well known in the western Massachusetts market. Following successful closing of the transaction, Sprague will own the largest distillate tankage position in the area, supplying heating oil, diesel fuel and kerosene into regions not served by its existing network of deep-water terminals on the coast. The transaction is expected to be accretive to distributable cash flow and generate approximately $3 to $4 million of adjusted EBITDA annually. Sprague intends to fund the transaction with borrowings from its senior secured credit facility.
“We have long considered L.E. Belcher’s business and terminal assets as one of the best in New England, and are pleased to be chosen as the team to carry the Hough family legacy of customer service in the Springfield region into the future,” announced David Glendon, President and Chief Executive Officer. “As a supplier to L.E. Belcher for many years, we know the market very well and are looking forward to welcoming new employees to the Sprague team. Our acquisition strategy of pursuing high-quality assets in strategic locations has once again paid off with an attractive bolt-on purchase in one of the few remaining Northeast markets where Sprague did not control a terminal asset.”