March 2, 2015 [OPIS] - Valero Energy Partners said on Friday that it will acquire some Houston and Louisiana crude and refined products terminaling assets from subsidiaries of Valero Energy Corp. for $671 million.
In the transaction, the partnership will receive the outstanding membership interests in Valero Partners Houston and Valero Partners Louisiana for total consideration of about $671 million.
The transaction is expected to be immediately accretive to the partnership and its unitholders and is expected to close effective March 1, 2015.
Valero Partners Houston operates a crude oil, intermediates and refined-petroleum-products terminal located on the Houston ship channel that supports Valero’s Houston refinery. The assets consist of storage tanks with 3.6 million bbl of storage capacity.
Valero Partners Louisiana operates a crude oil, intermediates and refined-petroleum-products terminal located on the Mississippi River in Norco, La., that supports Valero’s St. Charles refinery. The assets consist of storage tanks with 10 million bbl of storage capacity.
The partnership expects to finance the acquisition with $211 million of cash, $200 million of borrowings under its revolving credit facility, $160 million in borrowings under a five-year subordinated loan agreement with Valero, and the issuance of 1,908,100 common units, representing limited partner interests, and 38,941 general partner units to a subsidiary of Valero valued, collectively, at $100 million.
The newly issued Valero Energy Partners units will be allocated between common units and general partner units 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 subsidiaries of Valero. The businesses to be acquired are expected to contribute approximately $75 million of EBITDA in their first full year of
operation.
Valero Energy Partners LP is a 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 several of Valero’s refineries.
