Valero Energy Partners LP has agreed to acquire McKee Terminal Services Business from a subsidiary of Valero Energy Corporation for USD 240 million. The transaction is expected to close on April 1.
The business to be acquired is a terminal business that supports Valero’s McKee refinery located in Sunray, Texas, U.S.A. The assets consist of 75 tanks with 4.4 million barrels of storage capacity for crude oil, intermediates and refined petroleum products.
The acquisition will be financed with USD 139 million of borrowings under its revolving credit facility, USD 65 million of cash, and the issuance of additional common units and general partner units to Valero subsidiaries, which are valued collectively at approximately USD 36 million. The newly issued units will be allocated in a proportion allowing the general partner to maintain its 2% general partner interest.
Upon closing, Valero Energy Partners plans to enter into a 10-year terminaling agreement with a subsidiary of Valero.
The business to be acquired is expected to contribute approximately USD 28 million of EBITDA in its first 12 months of operation.
“We’re pleased to announce this next step in our growth strategy, which is complementary to the existing VLP McKee Logistics System,” said Joe Gorder, CEO of VLP’s general partner. “We remain well-positioned to deliver our targeted year-over-year distribution growth of 25% for 2016 and 2017.”
Valero Energy Partners is a fee-based master limited partnership formed by Valero Energy Corporation to own, operate, develop and acquire crude oil and refined products pipelines, terminals, and other transportation and logistics assets. With headquarters in San Antonio, Texas, U.S.A., the partnership’s assets include crude oil and refined petroleum products pipeline and terminal systems in the Gulf Coast and Mid-Continent regions of the United States that are integral to the operations of nine of Valero’s refineries.