USD Partners Acquires Hardisty South Terminal Assets

  • USD Partners LP USDP (Partnership) has agreed to acquire entities owning the Hardisty South terminal assets from USD Group LLC (Sponsor), exchange the Sponsor's economic general partner interest in the Partnership for a non-economic GP Interest, and eliminate the Sponsor's incentive distribution rights in the Partnership for total consideration of $75 million in cash and ~5.75 million common units.
  • The Partnership expects the transaction to increase its asset base's size, scale, and growth capacity and provide double-digit accretion to Distributable Cash Flow per Unit in 2023.
  • The deal optimizes operational and commercial synergies of Hardisty Terminal and consolidates benefits of blue-chip Diluent Recovery Unit asset growth at the MLP for the benefit of all Partnership unitholders.
  • The Partnership expects to fund the cash portion with borrowings under its senior secured credit facility's $275 million.
  • As of December 31, 2021, the Partnership had ~$3.7 million of unrestricted cash and equivalents.
  • The Partnership expects the transaction to close during 2Q22. USDG will hold a non-economic GP interest in the Partnership and ~17.3 million common units post-closing.
  • Price Action: USDP shares are trading higher by 1.24% at $5.72 on the last check Monday.
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