BRENTWOOD, Tenn.--(BUSINESS WIRE)--May 14, 2015--
Delek US Holdings, Inc. (NYSE: DK) (“Delek US”) announced that it has
completed the acquisition of approximately 33.7 million shares, or
approximately 48 percent of the outstanding shares, of Alon USA Energy,
Inc. (NYSE: ALJ) (“Alon USA”) common stock from Alon Israel Oil Company,
Ltd. (“Alon Israel”).
Uzi Yemin, Chairman, President and Chief Executive Officer of Delek US
stated, “We are pleased to have completed this transaction quickly and
would like to thank the management teams of both Alon Israel and Alon
USA for their support during this process. In addition, through the
backing of our lenders, we were able to finance this transaction in a
timely manner. This acquisition is an exciting strategic step for us as
it broadens our asset diversity and we look forward to working with Alon
USA’s Board of Directors and management team in the future.”
Five seats on the eleven-member Alon USA board of directors previously
held by Alon Israel representatives have been filled by representatives
from Delek US. This includes Delek US Chairman, President and Chief
Executive Officer Uzi Yemin who has been named as the chairman of the
Alon USA board.
Prior to commencing negotiations with Alon Israel, Delek US entered into
a stockholder agreement with Alon USA. During the first year following
the closing of this transaction, the stockholder agreement allows Delek
US to acquire up to 49.99 percent of the outstanding shares of Alon USA
at its discretion, with additional ownership above this threshold
subject to the approval of the independent members of Alon USA’s board
of directors. The stockholder agreement will expire on May 14, 2016, and
Delek US will then have no further restrictions under this agreement
related to increasing ownership in Alon USA.
The consideration paid by Delek US to acquire the Alon USA common stock
consists of the issuance of 6.0 million shares of restricted Delek US
common stock to Alon Israel; an unsecured $145.0 million promissory note
with an interest rate of 5.5% payable to Alon Israel, which matures in
January 2021; and $200.0 million of cash. Within two years of the
closing of this transaction, an additional 200,000 shares of Delek US
common stock may be issued to Alon Israel under certain circumstances as
outlined in the stock purchase agreement with Alon Israel.
The cash payment was funded through a combination of cash on hand and an
increase in Lion Oil’s term loan credit facility from $99.0 million to
$275.0 million. The second amended and restated Lion Oil term loan
facility, which closed on the same date as the acquisition of Alon USA
common stock, has a five-year term and the interest rate is based, at
Lion Oil’s election, on a LIBOR or base rate plus applicable margins,
subject in each case to an all-in interest rate floor of 5.5%. Under the
second amended and restated term loan facility, Fifth Third Bank is the
administrative agent, lead collateral agent, a joint lead arranger and
sole book runner, Bank Hapoalim B.M. is designated account collateral
agent and a joint lead arranger, and Israel Discount Bank of New York is
a joint lead arranger.
The approximate value of the transaction consideration is $564.5 million
based upon a closing price of $36.59 per share of Delek US common stock
on May 13, 2015.
Bank of America Merrill Lynch and Barclays acted as financial advisors
to Delek US in connection with this transaction.
About Delek US Holdings, Inc.
Delek US Holdings, Inc. is a diversified downstream energy company with
assets in petroleum refining, logistics and convenience store retailing.
The refining segment consists of refineries operated in Tyler, Texas and
El Dorado, Arkansas with a combined nameplate production capacity of
155,000 barrels per day. Delek US Holdings, Inc. and its affiliates own
approximately 62 percent (including the 2 percent general partner
interest) of Delek Logistics Partners, LP. Delek Logistics Partners, LP
(NYSE: DKL) is a growth-oriented master limited partnership focused on
owning and operating midstream energy infrastructure assets. The retail
segment markets fuel and merchandise through a network of approximately
360 company-operated convenience store locations operated under the
MAPCO Express®, MAPCO Mart®, East Coast®, Fast Food and Fuel™, Favorite
Markets®, Delta Express® and Discount Food Mart™ brand names. Delek US
Holdings, Inc. also owns approximately 48 percent of the outstanding
common stock of Alon USA Energy, Inc. (NYSE: ALJ).
Safe Harbor Provisions Regarding Forward-Looking Statements
This press release contains forward-looking statements that are based
upon current expectations and involve a number of risks and
uncertainties. Statements concerning current estimates, expectations and
projections about future results, performance, prospects and
opportunities and other statements, concerns, or matters that are not
historical facts are “forward-looking statements,” as that term is
defined under the federal securities laws.
Investors are cautioned that the following important factors, among
others, may affect these forward-looking statements. These factors
include but are not limited to: management’s ability to execute its
strategy of growth through acquisitions and the transactional risks
associated with acquisitions; changes in the scope, costs, and/or timing
of capital and maintenance projects; risks and uncertainties with
respect to the quantities and costs of crude oil we are able to obtain
and the price of the refined petroleum products we ultimately sell;
operating hazards inherent in transporting, storing and processing crude
oil and intermediate and finished petroleum products; gains and losses
from derivative instruments;; our competitive position and the effects
of competition; the projected growth of the industries in which we
operate; general economic and business conditions, particularly levels
of spending relating to travel and tourism or conditions affecting the
southeastern United States risks associated with our inability to
control the operations of Alon USA as a result of our minority ownership
position; and other risks contained in our filings with the United
States Securities and Exchange Commission.
Forward-looking statements should not be read as a guarantee of future
performance or results and will not be accurate indications of the times
at, or by which such performance or results will be achieved.
Forward-looking information is based on information available at the
time and/or management’s good faith belief with respect to future
events, and is subject to risks and uncertainties that could cause
actual performance or results to differ materially from those expressed
in the statements. Delek US undertakes no obligation to update or revise
any such forward-looking statements.
Source: Delek US Holdings, Inc.
Delek US Holdings, Inc.
Keith Johnson, 615-435-1366
President of Investor Relations
Alpha IR Group
Founder & CEO