May 06, 2024 [Storage Terminals Magazine]- Sunoco LP has recently finalised the acquisition of NuStar Energy L.P. and simultaneously announced a 4 percent boost in its quarterly distribution.
With the acquisition of NuStar now complete, Sunoco solidifies its position, enhancing its financial standing and growth prospects. The merger, endorsed by NuStar unitholders at a special meeting on May 1, 2024, saw NuStar’s common units cease trading on the New York Stock Exchange as of May 3, 2024.
This strategic move is expected to yield significant benefits for Sunoco, including enhanced stability, an improved credit profile, and increased growth potential. Sunoco anticipates realising a minimum of $150 million in expense and commercial synergies, along with an additional annual cash flow of at least $50 million from refinancing activities. Furthermore, the transaction is projected to drive immediate accretion to distributable cash flow per LP unit, with expected growth exceeding 10 percent by the third year post-closure.
In tandem with this milestone, Sunoco’s board of directors has declared a quarterly distribution for Q1 2024, amounting to $0.8756 per common unit or $3.5024 per common unit annually. This distribution, slated for payment on May 20, 2024, will benefit common unitholders of record as of May 13, 2024, including former NuStar unitholders who received Sunoco common units post-merger.
This 4 percent increase in the quarterly distribution, following a 2 percent rise last year, underscores Sunoco’s ongoing confidence in its business trajectory and its commitment to delivering value to stakeholders.
Further insights into the NuStar acquisition and distribution increase will be provided during Sunoco’s first-quarter 2024 conference call scheduled for May 8, 2024, at 9:00 a.m. Central Daylight Time.
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