SAN ANTONIO, Feb. 27, 2015 /PRNewswire/ -- Valero Energy Partners LP (NYSE:
VLP, the Partnership) today announced that the board of directors of its
general partner has approved the Partnership's acquisition of certain
businesses from subsidiaries of Valero Energy Corporation (NYSE: VLO,
Valero). In the transaction, the Partnership will receive the outstanding
membership interests in Valero Partners Houston, LLC and Valero Partners
Louisiana, LLC 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.
"This acquisition is our largest yet and is consistent with our previously
communicated accelerated growth strategy," said Joe Gorder, Chairman,
President, and Chief Executive Officer.
The businesses to be acquired include the following assets and operations:
o Valero Partners Houston, LLC 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 barrels of storage capacity.
o Valero Partners Louisiana, LLC operates a crude oil, intermediates, and
refined petroleum products terminal located on the Mississippi River in
Norco, Louisiana, that supports Valero's St. Charles refinery. The assets
consist of storage tanks with 10 million barrels 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 VLP units will be allocated
between common units and general partner units in a proportion allowing the
general partner to maintain its 2 percent 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.
The terms of the transaction were approved, subject to the execution of
definitive documentation, by the board of directors of the general partner,
following the approval and recommendation of the board's conflicts committee.
The conflicts committee is composed of independent directors and was advised
by Evercore Group L.L.C., its financial advisor, and Akin Gump Straus Hauer &
Feld LLP, its legal counsel.
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