October 13, 2015 [OPIS] - USD Partners, a Houston-based crude rail logistics company, said on Monday that it has agreed to acquire 100% of the equity interests in Casper Crude to Rail LLC (Casper terminal) from Stonepeak Infrastructure Partners, Cogent Energy Solutions and The Granite Peak Group for total consideration of $225 million, subject to closing adjustments.
The purchase price includes $208.3 million of cash and $16.7 million of limited partner units issued to the sellers.
The Casper terminal’s principal assets include a unit train-capable crude oil loading rail terminal with 100,000 b/d of capacity and dual loop tracks and six customer-dedicated storage tanks with 900,000 bbl of total capacity and a six-mile, 24-inch diameter pipeline with a direct connection from Spectra Energy Partners LP’s Express crude oil pipeline, which runs from Hardisty, Alberta, to Casper, Wyo., and provides access to multiple grades of Canadian crude oil.
The terminal’s location supports access to multiple refining centers across the U.S., enhanced by onsite storage and blending capabilities, which enables customers to ship preferred grades of crude oil from Casper.
Additionally, the terminal’s footprint and modular design allows for the addition of a second loading station and an additional 1.1 million bbl of storage capacity with minimal disruption to existing operations and relatively low incremental capital costs.
The Casper terminal commenced operations in September 2014 and is supported by take-or-pay contracts with primarily investment-grade refiners and a weighted-average remaining contract life of approximately three years.
For the full year 2016, the Casper terminal is expected to contribute minimum contracted Adjusted EBITDA of approximately $26 million.
The partnership intends to fund the cash portion of the purchase price with approximately $35 million of cash on hand and approximately $173 million of senior secured credit facility borrowings.
The partnership will issue approximately 1.7 million common units as equity consideration based on a unit price of $9.62, the volume-weighted average daily closing price for the partnership’s common units for the 30 trading day period prior to Oct. 12, 2015.
The partnership believes the transaction will be immediately accretive to distributable cash flow per unit upon closing, which is expected to occur in the fourth quarter of 2015.
The partnership’s existing assets consist primarily of an origination crude-by-rail terminal in Hardisty, Alberta, Canada, with capacity to load up to two 120-railcar unit trains per day and two destination unit train-capable ethanol rail terminals in San Antonio, Texas, and West Colton, Calif., with a combined capacity of approximately 33,000 b/d.
