Emerge Energy Services LP Announces Agreement to Divest Fuels Business in Deal Valued at Approximately $179 million
June 23 2016 - 4:30PM
Transaction Would Drive
Substantial Debt Reduction and Simplification of Emerge's Operating
Platform
Southlake, Texas (June 23, 2016) - Emerge Energy
Services LP ("Emerge" or "the Company") (NYSE: EMES) is pleased to
announce that it has entered into a definitive agreement for the
sale of Emerge's fuels business (the "Fuels Business") to Sunoco LP
("Sunoco") (NYSE: SUN), a publicly traded master limited
partnership engaged in the wholesale distribution and retail sale
of motor fuels. The Fuels Business is comprised of Dallas-based
Direct Fuels LLC and Birmingham-based Allied Energy Company LLC,
both wholly owned subsidiaries of Emerge, and engages primarily in
the processing of transmix and the distribution of refined
fuels.
The aggregate purchase price is $178.5 million,
subject to working capital adjustments, and the transaction will be
completed on a cash-free, debt-free basis. As stated
previously, Emerge intends to apply the proceeds, net of
transaction related expenses, to reduce its outstanding debt.
Following the sale, Emerge will become a pure-play
business with all of its assets and operations focused on its Sand
segment, which is engaged in the businesses of mining, processing
and distributing silica sand, a key input for the hydraulic
fracturing of oil and natural gas wells.
Ted W. Beneski, Chairman of the Board of Emerge,
commented, "This agreement with Sunoco is the result of a thorough
process undertaken to maximize value for unitholders. We are
pleased with the results of this process and could not be happier
to be partnering on this transaction with Sunoco, a top operator
with a stellar reputation in the marketplace. The Fuels Business
will be in good hands."
With respect to Emerge's use of proceeds, Mr.
Beneski continued, "As we have stated on previous earnings calls,
we undertook the sale of the Fuels Business to generate proceeds to
pay down Emerge's debt. I am encouraged to say that the cash
proceeds from this transaction will allow Emerge to substantially
reduce its overall debt levels, and will better position the
company to opportunistically execute on strategic initiatives and
create long term value as the industry looks to exit the current
prolonged downturn."
The divestiture of the Fuels Business is subject
to regulatory approval and customary closing conditions and is
expected to be completed during the third quarter of 2016. J.P.
Morgan Securities LLC is acting as exclusive financial advisor to
Emerge, and Latham & Watkins LLP is acting as legal
counsel.
About Emerge Energy Services
LP
Emerge Energy Services LP (NYSE: EMES) is a
growth-oriented limited partnership engaged in the businesses of
mining, producing, and distributing silica sand, a key input for
the hydraulic fracturing of oil and natural gas wells. Emerge
Energy also processes transmix, distributes refined motor fuels,
operates bulk motor fuel storage terminals, and provides
complementary fuel services. Emerge Energy operates its sand
segment through its subsidiary Superior Silica Sands LLC and its
fuel segment through its subsidiaries Direct Fuels LLC and Allied
Energy Company LLC.
Forward-Looking
Statements
This release contains certain statements that are
"forward-looking statements." These statements can be identified by
the use of forward-looking terminology including "may," "believe,"
"will," "expect," "anticipate," or "estimate" and specifically
include the anticipated closing of the divestiture of the Fuels
Business. These forward-looking statements involve risks and
uncertainties, and there can be no assurance that actual results
will not differ materially from those expected by management of
Emerge Energy Services LP. When considering these forward-looking
statements, you should keep in mind the risk factors and other
cautionary statements in Emerge's Annual Report on Form 10-K and
other reports filed with the SEC. The risk factors and other
factors noted in the reports filed by Emerge with the SEC could
cause actual results to differ materially from those contained in
any forward-looking statement. Except as required by law, Emerge
does not undertake any obligation to update or revise such
forward-looking statements to reflect events or circumstances that
occur after the date hereof.
PRESS CONTACT
Investor Relations
(817) 865-5830
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Emerge Energy Services LP via Globenewswire
HUG#2022957
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