Blueknight to be Acquired by its General Partner, Ergon
April 22 2022 - 7:30AM
Blueknight Energy Partners, L.P. (“Blueknight” or the
“Partnership”) (Nasdaq: BKEP and BKEPP) today announced that it has
entered into a definitive agreement and plan of merger (“Merger
Agreement”) pursuant to which an affiliate of Ergon, Inc. (“Ergon”)
would acquire all of the outstanding common and preferred units of
the Partnership not already owned by Ergon and its affiliates (the
“Public Common Units” and “Public Preferred Units”). The agreement
follows the offer made by Ergon in October 2021 to acquire the
Public Common Units and Public Preferred Units.
The agreement provides for an all-cash transaction, whereby:
- each holder of the Public Common Units would receive $4.65 per
common unit owned, representing a 51.5% premium to the market
closing price prior to Ergon’s offer made on October 8, 2021 and a
40.5% premium to the trailing 30-day volume-weighted average price
on April 21, 2022; and
- each holder of the Public Preferred Units would receive $8.75
per preferred unit owned, which is greater than the 52-week trading
high for such units and represents a 5.3% premium to the market
closing price prior to Ergon’s offer made on October 8, 2021 and
a 3.6% premium to the trailing 30-day volume-weighted average
price on April 21, 2022.
The Board of Directors of Blueknight Energy Partners G.P.,
L.L.C., the general partner of Blueknight (the “GP Board”),
delegated to a conflicts committee of the GP Board (the “BKEP
Conflicts Committee”), consisting solely of the Partnership’s three
independent directors, the authority to review, evaluate and
negotiate and approve the transaction on behalf of Blueknight and
the holders of the Public Common Units. The BKEP Conflicts
Committee, after evaluating the transaction with its independent
legal and financial advisors, unanimously approved the transaction
on behalf of the holders of the Public Common Units. Following the
receipt of the recommendation of the BKEP Conflicts Committee, the
GP Board approved the transaction.
The transaction is expected to close in mid-2022, subject to
customary approvals. Ergon has committed to vote its units to
approve the transaction.
Advisors
The BKEP Conflicts Committee engaged Gibson, Dunn & Crutcher
LLP and Evercore as its legal and financial advisors. Ergon engaged
Baker Botts L.L.P. and Jefferies LLC as its legal and financial
advisors.
Forward-Looking Statements
This release includes forward-looking statements – that is,
statements related to future, not past, events and circumstances
which may relate to one or more of the closing, expected timing,
and benefits of the proposed acquisition by Ergon to acquire all
outstanding common and preferred units of Blueknight not already
owned directly or indirectly by Ergon, the financial condition,
results of operations and businesses of Blueknight and certain of
the plans and objectives of Blueknight or Ergon with respect to
these items. Statements included in this release that are not
historical facts (including, without limitation, any statements
about future financial and operating results, guidance, projected
or forecasted financial results, objectives, project timing,
expectations and intentions and other statements that are not
historical facts) are forward-looking statements. Such
forward-looking statements are subject to various risks and
uncertainties. If any of these risks or uncertainties materializes,
or should underlying assumptions prove incorrect, actual results or
outcomes may vary materially from those expected. The Partnership
undertakes no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise.
About Blueknight
Blueknight (Nasdaq: BKEP and BKEPP) is a publicly traded master
limited partnership that owns the largest independent asphalt
terminalling network in the country. Operations include
9.0 million barrels of liquid asphalt storage capacity across
54 terminals and 26 states throughout the U.S. Blueknight is
focused on providing integrated terminalling solutions for
tomorrow’s infrastructure and transportation end markets. More
information is available at www.bkep.com.
About Ergon
Ergon is a privately held company formed in 1954 and is based in
Jackson, Mississippi, with over 3,000 employees globally. Ergon and
its subsidiaries are engaged in a wide range of operations that are
categorized into six primary business segments: Refining &
Marketing, Specialty Chemicals, Asphalt & Emulsions, Midstream
& Logistics, Oil & Gas, and Construction & Real Estate.
More information is available at www.ergon.com.
Additional Information and Where You Can Find
It
In connection with the transaction referred to in this material,
Blueknight expects to file with the Securities and Exchange
Commission (“SEC”) and mail to Blueknight’s unitholders a proxy
statement and other relevant documents, including a Schedule 13E-3.
This material is not a substitute for the proxy statement or the
Schedule 13E-3 or for any other document that Blueknight may file
with the SEC and send to Blueknight’s unitholders in connection
with the proposed transaction. INVESTORS AND UNITHOLDERS OF
BLUEKNIGHT ARE URGED TO READ THE PROXY STATEMENT AND THE SCHEDULE
13E-3 AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. Investors and security holders will be able
to obtain free copies of the proxy statement (when available) and
other documents filed with the SEC by Blueknight through the
website maintained by the SEC at http://www.sec.gov. Copies of the
documents filed with the SEC by Blueknight will be available free
of charge through Blueknight’s website at www.bkep.com in the
“Investors” tab near the left of the page, or by contacting
Blueknight’s Investor Relations Department at (918) 237-4032.
Participants in the Solicitation
Blueknight, Ergon and certain of their directors, executive
officers and employees may be deemed participants in the
solicitation of consents from Blueknight unitholders in connection
with the proposed transaction. Information regarding the persons
who may, under the rules of the SEC, be deemed participants in the
solicitation of the unitholders of Blueknight in connection with
the proposed transaction, including a description of their direct
or indirect interests, by security holdings or otherwise, will be
set forth in the consent statement/prospectus when it is filed with
the SEC. Information about the directors and executive officers of
Blueknight and their ownership of Blueknight common and preferred
units is set forth in Blueknight’s Form 10-K for the year ended
December 31, 2021, as previously filed with the SEC on March 9,
2022. Free copies of these documents may be obtained as described
in the paragraphs above.
Investor Relations Contact:
Matthew Lewis, Chief Financial Officer
(918) 237-4032
investor@bkep.com
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