UPDATE: Valero Energy Partners LP To Acquire Certain Valero Terminaling Businesses for $671M

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.