Agreement includes an 18-month fuel supply agreement
Transaction expected to close by year end
BRENTWOOD, Tenn.--(BUSINESS WIRE)--Aug. 29, 2016--
Delek US Holdings, Inc. (NYSE: DK)(“Delek”) today announced that it has
entered into a definitive agreement with Compañía de Petróleos de Chile
COPEC S.A. (SNSE:COPEC) (“COPEC”), pursuant to which Delek will sell
MAPCO Express, Inc., and certain related affiliated companies, (together
“MAPCO”) to a U.S. subsidiary of COPEC for total cash consideration of
$535 million (the “Transaction”) plus MAPCO’s cash on hand at closing.
This transaction is subject to customary closing conditions and is
expected to close by year end.
Following a strategic review by Delek of options to unlock the value of
its retail assets, which included a potential drop down to Delek
Logistics Partners, LP (NYSE: DKL), Delek determined that the sale to
COPEC was an efficient and prudent way to unlock value for Delek’s
shareholders. Debt associated with the retail assets, which was
approximately $160.0 million at June 30, 2016, will be repaid at
closing. As part of this Transaction, Delek will continue to supply fuel
to certain MAPCO retail locations under an 18-month supply agreement.
Uzi Yemin, Chairman, President and Chief Executive Officer of Delek,
said, “We have unlocked the value of our retail assets through this
transaction with COPEC. I want to thank the MAPCO team for their efforts
in developing the MAPCO brand. The compelling valuation we were able to
achieve is a direct result of their hard work. This transaction creates
an exciting opportunity for MAPCO and its employees as it becomes a key
component of COPEC’s U.S. growth strategy. Delek also gains a partner in
retail fuel sales and will continue to supply locations through its
wholesale business and space on the Colonial Pipeline system. As a
result, our consolidated RINs position should not be significantly
changed by this transaction. At June 30, 2016, we had approximately
$377.0 million of cash, and the completion of this transaction should
give us additional financial flexibility. This flexibility can be used
to support Delek Logistics Partners as it explores growth opportunities,
as well as continuing to evaluate strategic opportunities to create long
term value for our shareholders.”
Delek’s exclusive financial advisor was RBC Capital Markets, LLC.
COPEC’s financial advisor was Raymond James & Associates, Inc. and legal
advisor was Simpson Thacher & Bartlett LLP.
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 also
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 motor fuel and convenience merchandise through a network
of approximately 348 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).
About Copec S. A.
COPEC is a wholly owned subsidiary of one of the largest public
companies in Chile, “Empresas Copec S.A.”, which is a holding company
operating through subsidiaries in fuel and lubricants distribution &
convenience stores, forestry, fishing, and other industries.
Empresas Copec S.A. was founded in 1934 and is headquartered in
Santiago, Chile and is among Chile’s largest publicly traded companies.
Empresas Copec S.A. operates mainly in two large areas where it has
sustainable competitive advantages: natural resources and energy. Its
main industry sectors include fuel distribution & convenience stores,
forestry, fishing and other industries. The company, through its
subsidiary Celulosa Arauco, has commercial presence in over 80 countries
and has production facilities in Chile, Argentina, Brazil, Canada, the
United States and Uruguay, which provide potential for future growth.
AntarChile S.A. (SNSE: ANTARCHILE) has a controlling stake of
approximately 60% in Empresas Copec S.A.
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: 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; gains and
losses from derivative instruments; changes in the scope, costs, and/or
timing of capital and maintenance projects; management’s ability to
execute its strategy of growth through acquisitions and the
transactional risks associated with acquisitions; acquired assets may
suffer a diminishment in fair value as a result of which we may need to
record a write-down or impairment in carrying value of the asset on the
balance sheet and a resultant loss recognized in the statement of
operations; the effect on our financial results by the financial results
of Alon USA Energy, Inc., in which we hold a significant equity
investment; operating hazards inherent in transporting, storing and
processing crude oil and intermediate and finished petroleum products;
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; 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 and COPEC undertake no obligation to update
or revise any such forward-looking statements.
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Source: Delek US Holdings, Inc.
Delek US Holdings, Inc.
U.S. Investor/Media Relations:
Vice President of Investor Relations