NuStar to Significantly Expand Its Presence in Port of Corpus Christi with Accretive Acquisition
October 21 2016 - 6:45AM
Business Wire
NuStar to purchase crude oil and refined
product terminal assets from Martin Midstream Partners
NuStar Energy L.P. (NYSE: NS) today announced that it has signed
an agreement to purchase crude oil and refined product storage
assets in the Port of Corpus Christi from Martin Midstream Partners
L.P. (Nasdaq: MMLP) for a net $93 million. The acquisition, which
is expected to close by the end of the fourth quarter of 2016, is
expected to be immediately accretive to NuStar’s earnings based on
the terminal’s current, actual volumes. It also reflects an
approximate seven times multiple based on the forecasted four-year
average earnings before interest, taxes, depreciation and
amortization (EBITDA) attributable to the assets of $13.5 million
annually. When combined with NuStar’s existing terminal operations
in Corpus Christi, the acquisition will give NuStar over 3.6
million barrels of total storage in the Port of Corpus Christi,
including 3.1 million barrels of crude oil storage and 577,000
barrels of refined product storage.
The terminal NuStar is acquiring includes 1.15 million barrels
of total storage, which is comprised of 900,000 barrels of crude
oil storage and 250,000 barrels of refined product storage. The
terminal has direct connectivity to Eagle Ford crude oil production
and receives crude oil and condensate via its connection to the
Harvest Pipeline and through its six-bay truck rack. The terminal
has access to two of the port’s deep-water crude oil docks,
including exclusive use of the port’s new crude oil dock, and a
barge dock. The terminal is located on 25 acres, and has room for
further expansion.
NuStar also expects to achieve significant operational synergies
between its existing North Beach Terminal and the Martin terminal,
which are located adjacent to each other in the Port of Corpus
Christi.
“Corpus Christi has been a strategic hub for NuStar for many
years, and we are very pleased to make this acquisition that will
not only solidify our presence there, but also give us the ability
to serve a new pipeline and new customers, and provide us greater
connectivity to domestic and international crude oil and refined
products markets,” said NuStar President and CEO Brad Barron. “Just
as importantly, it will also allow us to better serve our existing
customers. With the use of the docks that are part of this
acquisition, we are better able to meet the future needs of an
existing customer who is interested in increasing volumes and the
length of their contract with us.
“And this terminal fits perfectly within our acquisition
criteria as it is synergistic with our existing assets, is
immediately accretive to earnings and has additional upside growth
potential,” Barron added.
About NuStar Energy
NuStar Energy L.P., a publicly traded master limited partnership
based in San Antonio, is one of the largest independent liquids
terminal and pipeline operators in the nation. NuStar currently has
approximately 8,700 miles of pipeline and 79 terminal and storage
facilities that store and distribute crude oil, refined products
and specialty liquids. The partnership’s combined system has
approximately 94 million barrels of storage capacity, and NuStar
has operations in the United States, Canada, Mexico, the
Netherlands, including St. Eustatius in the Caribbean, and the
United Kingdom. For more information, visit NuStar Energy L.P.'s
website at www.nustarenergy.com.
About Martin Midstream
Partners
Martin Midstream Partners L.P. is a publicly traded limited
partnership with a diverse set of operations focused primarily in
the United States Gulf Coast region. MMLP’s primary business
segments include: (1) terminalling, storage and packaging
services for petroleum products and by-products; (2) natural gas
services, including liquids transportation and distribution
services and natural gas storage; (3) sulfur and sulfur-based
products processing, manufacturing, marketing and distribution; and
(4) marine transportation services for petroleum products and
by-products.
Use of Non-GAAP Financial Information -- This news
release includes forecasted EBITDA. This is a non-GAAP financial
measure. Forecasted EBITDA is based on the partnership’s
projections for the assets to be acquired. Forecasted EBITDA is
included to help facilitate comparisons of operating performance of
the partnership with other companies in our industry, as well as
help facilitate an assessment of our assets' projected ability to
generate sufficient cash flow to make distributions to our
partners. Forecasted EBITDA is not presented as an alternative to
the nearest GAAP financial measure, net income, and should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP. We are unable to
present a reconciliation of forecasted EBITDA to net income because
certain elements of net income, including interest, depreciation
and taxes, are not available. Together, these items generally
result in EBITDA being significantly greater than net income.
Cautionary Statement Regarding Forward-Looking Statements
This press release includes forward-looking statements regarding
future events, such as the partnership’s future performance. All
forward-looking statements are based on the partnership’s beliefs
as well as assumptions made by and information currently available
to the partnership. These statements reflect the partnership’s
current views with respect to future events and are subject to
various risks, uncertainties and assumptions. These risks,
uncertainties and assumptions are discussed in NuStar Energy L.P.’s
and NuStar GP Holdings, LLC’s 2015 annual reports on Form 10-K and
subsequent filings with the Securities and Exchange Commission.
Actual results may differ materially from those described in the
forward-looking statements.
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version on businesswire.com: http://www.businesswire.com/news/home/20161021005144/en/
NuStar Energy L.P.Media:Mary
Rose Brown, 210-410-8926maryrose.brown@nustarenergy.comorGreg
Matula, 210-601-3897greg.matula@nustarenergy.comorChris Cho,
210-831-8382chris.cho@nustarenergy.comorInvestors:Chris Russell,
210-918-3057chris.russell@nustarenergy.com
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