March 29, 2016 [OPIS] - Valero Energy Partners said it will acquire the McKee Terminal Services Business from a subsidiary of Valero Energy Corp. for $240 million.
The transaction is expected to close April 1.
The business to be acquired is a terminal business that supports Valero’s McKee refinery. The assets consist of 75 tanks with 4.4 million bbl of storage capacity for crude oil, intermediates and refined petroleum products.
The partnership expects to finance the acquisition with $139 million of borrowing under its revolving credit facility, $65 million of cash and the issuance of additional common units and general partner units to Valero subsidiaries, valued collectively at about $36 million. The newly issued units will be allocated in a proportion allowing the general partner to maintain its 2% general partner interest.
Upon closing, the partnership plans to enter into a 10-year terminaling agreement with a subsidiary of Valero. The business to be acquired is expected to contribute approximately $28 million of EBITDA in its first 12 months of operation.
