August 23, 2016 [OPIS] - Valero Energy Partners said Monday that it will acquire the Meraux and Three Rivers Terminal Services Business from a subsidiary of Valero Energy Corp. (Valero) for about $325 million.
In its first 12 months of operation, the business to be acquired is expected to contribute approximately $25 million of net income and approximately $39 million of earnings before interest, taxes, depreciation, and amortization (EBITDA). The transaction is expected to close effective Sept. 1.
The business to be acquired includes terminals that support Valero’s Meraux and Three Rivers refineries.
The Meraux assets consist of 24 tanks with 3.9 million bbl of storage capacity for crude oil, intermediates and refined petroleum products.
The Three Rivers assets consist of 62 tanks with 2.25 million bbl of storage capacity for crude oil, intermediates and refined petroleum products.
The partnership expects to finance the $325 million acquisition with borrowings under its revolving credit facility, cash on hand, and the issuance of additional common units and general partner units to Valero subsidiaries. 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 10-year terminaling agreements with a subsidiary of Valero. The agreements are expected to include minimum volume commitments covering approximately 85% of planned throughput.
Valero Energy Partners LP is a fee-based master limited partnership formed by Valero Energy Corp. to own, operate, develop and acquire crude oil and refined petroleum products pipelines, terminals, and other transportation and logistics assets.
With headquarters in San Antonio, the partnership’s assets include crude oil and refined petroleum products pipeline and terminal systems in the Gulf Coast and Midcontinent regions of the United States that are integral to the operations of nine of Valero’s refineries.
