SAN ANTONIO, Feb. 27, 2015 /PRNewswire/ -- Valero Energy
Partners LP (NYSE: VLP, the Partnership) today announced that the
board of directors of its general partner has approved the
Partnership's acquisition of certain businesses from subsidiaries
of Valero Energy Corporation (NYSE: VLO, Valero). In the
transaction, the Partnership will receive the outstanding
membership interests in Valero Partners Houston, LLC and Valero
Partners Louisiana, LLC for total consideration of about
$671 million. The transaction
is expected to be immediately accretive to the Partnership and its
unitholders and is expected to close effective March 1, 2015.
"This acquisition is our largest yet and is consistent with our
previously communicated accelerated growth strategy," said
Joe Gorder, Chairman, President, and
Chief Executive Officer.
The businesses to be acquired include the following assets and
operations:
- Valero Partners Houston, LLC operates a crude oil,
intermediates, and refined petroleum products terminal located on
the Houston ship channel that
supports Valero's Houston
refinery. The assets consist of storage tanks with 3.6
million barrels of storage capacity.
- Valero Partners Louisiana, LLC operates a crude oil,
intermediates, and refined petroleum products terminal located on
the Mississippi River in Norco,
Louisiana, that supports Valero's St. Charles refinery. The assets consist
of storage tanks with 10 million barrels of storage
capacity.
The Partnership expects to finance the acquisition with
$211 million of cash,
$200 million of borrowings under its revolving credit
facility, $160 million in borrowings
under a five-year subordinated loan agreement with Valero, and the
issuance of 1,908,100 common units, representing limited partner
interests, and 38,941 general partner units to a subsidiary of
Valero valued, collectively, at $100
million. The newly issued VLP units will be allocated
between common units and general partner units in a proportion
allowing the general partner to maintain its 2 percent general
partner interest.
Upon closing, the Partnership plans to enter into 10-year
terminaling agreements with subsidiaries of Valero. The
businesses to be acquired are expected to contribute approximately
$75 million of EBITDA in their first
full year of operation.
The terms of the transaction were approved, subject to the
execution of definitive documentation, by the board of directors of
the general partner, following the approval and recommendation of
the board's conflicts committee. The conflicts committee is
composed of independent directors and was advised by Evercore Group
L.L.C., its financial advisor, and Akin Gump Straus Hauer &
Feld LLP, its legal counsel.
About Valero Energy Partners LP
Valero Energy Partners LP is a fee-based, growth-oriented,
traditional master limited partnership formed by Valero Energy
Corporation to own, operate, develop, and acquire crude oil and
refined petroleum products pipelines, terminals, and other
transportation and logistics assets. With headquarters in
San Antonio, 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 several of Valero's refineries.
Contacts
Investors:
John Locke, Executive Director –
Investor Relations, 210-345-3077
Karen Ngo, Manager – Investor
Relations, 210-345-4574
Media:
Bill Day, Vice President –
Communications, 210-345-2928
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Safe-Harbor Statement
This release contains forward-looking statements within the
meaning of federal securities laws. These statements discuss
future expectations, contain projections of results of operations
or of financial condition or state other forward-looking
information. You can identify forward-looking statements by
words such as "anticipate," "believe," "estimate," "expect,"
"forecast," "project," "could," "may," "should," "would," "will" or
other similar expressions that convey the uncertainty of future
events or outcomes. These forward-looking statements are not
guarantees of future performance and are subject to risks,
uncertainties and other factors, some of which are beyond the
Partnership's control and are difficult to predict. These
statements are often based upon various assumptions, many of which
are based, in turn, upon further assumptions, including examination
of historical operating trends made by the management of the
Partnership. Although the Partnership believes that these
assumptions were reasonable when made, because assumptions are
inherently subject to significant uncertainties and contingencies,
which are difficult or impossible to predict and are beyond its
control, the Partnership cannot give assurance that it will achieve
or accomplish these expectations, beliefs or intentions. When
considering these forward-looking statements, you should keep in
mind the risk factors and other cautionary statements contained in
the Partnership's filings with the Securities and Exchange
Commission, including the Form S-1 and prospectus relating to the
initial public offering of the Partnership's common units, and the
Partnership's annual reports on Form 10-K and quarterly reports on
Form 10-Q, available on the Partnership's website at
www.valeroenergypartners.com. These risks could cause the
Partnership's actual results to differ materially from those
contained in any forward-looking statement.
Use of Non-GAAP Financial Information
We define EBITDA as net income before income tax expense,
interest expense, and depreciation expense. EBITDA is a
supplemental financial measure that is not defined under
United States generally accepted
accounting principles (GAAP). We believe that the
presentation of EBITDA provides useful information to investors in
assessing our financial condition and results of operations.
The GAAP measure most directly comparable to EBITDA is net
income. EBITDA should not be considered an alternative to net
income in accordance with GAAP. EBITDA has important
limitations as an analytical tool because it excludes some, but not
all, items that affect net income. EBITDA should not be
considered in isolation or as a substitute for analysis of our
results as reported under GAAP. Additionally, because EBITDA
may be defined differently by other companies in our industry, our
definition of EBITDA may not be comparable to similarly titled
measures of other companies, thereby diminishing its utility.
VALERO ENERGY
PARTNERS LP
RECONCILIATION OF
FORECASTED NET INCOME UNDER GAAP TO EBITDA
(Unaudited, in
Thousands)
|
|
|
|
Full Year
Beginning March 1, 2015
Valero Partners
Houston and Louisiana
|
Forecasted net
income
|
$
37,300
|
Add: Forecasted
depreciation expense
|
20,000
|
Add: Forecasted
interest expense
|
18,100
|
Add: Forecasted
income tax expense
|
400
|
Forecasted
EBITDA
|
$
75,800
|
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SOURCE Valero Energy Partners LP