By Angela Chen
Valero Energy Partners LP has agreed to acquire certain
businesses from Valero Energy Corp. for $671 million in cash and
stock.
Valero Energy Partners, a limited partnership formed by Valero
Energy Corp., will buy outstanding member interests in Valero
Partners Houston LLC and Valero Partners Louisiana LLC.
Assets for Valero Houston include storage tanks with 3.6 million
barrels of storage capacity, while Valero Louisiana has 10 million
barrels of storage capacity. These businesses are expected to add
$75 million to earnings before interest, taxes, depreciation and
amortization in the first year of operation.
The deal will be financed with $211 million of cash, $200
million from a revolving credit facility, $160 million from a
five-year loan agreement and the issuance of about $100 million in
stock.
The transaction is expected to immediately add to earnings and
close on March 1.
Shares of Valero Energy Partners are up about 24% this year,
while shares of Valero Energy Corp. are up around 26% this
year.
Write to Angela Chen at angela.chen@dowjones.com
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