Delek Logistics Partners, LP (NYSE:DKL) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement
On February 26, 2018, Delek Logistics Partners, LP, a Delaware limited partnership (the “Partnership”), through its wholly-owned subsidiary DKL Big Spring, LLC, a Delaware limited liability company (“Buyer”), entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Delek US Holdings, Inc., a Delaware corporation (“Delek US”), as guarantor, and certain subsidiaries (such subsidiaries, the “Sellers”), to which, Buyer agreed to acquire, subject to the terms and conditions in the Purchase Agreement, certain logistics assets located at or associated with a refinery near Big Spring, Texas, owned and operated by Delek US and its affiliates (the “Big Spring Logistics Assets”) and the Sellers’ light products distribution terminal located in Stephens County, Oklahoma (the “Duncan Terminal” and, together with the Big Spring Logistics Assets, the “Transferred Assets”). The purchase price for the Transferred Assets is $315 million in cash, subject to certain post-closing adjustments. The Partnership expects to fund the acquisition with cash on hand and borrowings under the Partnership’s amended and restated senior secured revolving credit facility.
The Purchase Agreement contains certain representations, warranties, covenants and indemnities. In addition, the Purchase Agreement contemplates that, at closing, the parties will enter into long-term agreements whereby the Partnership’s subsidiaries will provide logistics, asphalt handling and marketing services to the Sellers.
The parties expect to close the transaction in March 2018.
The foregoing description of the Purchase Agreement is not complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, which is attached as Exhibit 2.1 to this Current Report on Form 8-K.
Relationships
Delek US owns a 61.5% limited partnership interest in the Partnership and a 94.6% interest in Delek Logistics GP, LLC, a Delaware limited liability company (the “General Partner”), which owns the entire 2.0% general partner interest and all incentive distribution rights in the Partnership. Each of the Partnership, the General Partner, Buyer, and the Sellers and the other subsidiaries of the Partnership is a direct or indirect subsidiary of Delek US. As a result, certain individuals, including officers and directors of Delek US and the General Partner, serve as officers and/or directors of more than one of such other entities. Additionally, the Partnership and Delek US have certain commercial relationships as further described in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2017.
Transactions
The Conflicts Committee of the Board of Directors of the General Partner (the “Conflicts Committee”), which is comprised solely of independent directors, authorized and approved the transaction and the agreements discussed above or contemplated by the Purchase Agreement to the Partnership’s First Amended and Restated Agreement of Limited Partnership and the General Partner’s Related Party Transactions Policy. The Conflicts Committee retained independent legal and financial advisors to assist it in evaluating, negotiating and acquiring the assets and documentation connected to the transaction. In approving the transaction, the Conflicts Committee based its decisions in part on an opinion from its independent financial advisor that the consideration to be paid by the Partnership was fair to the Partnership and its subsidiaries and the unaffiliated common unitholders of the Partnership from a financial point of view.
Item 9.01 Financial Statements and Exhibits.
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(a) |
Financial statements of business acquired. |
Not applicable.
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(b) |
Pro forma financial information. |
Not applicable.
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(c) |
Shell company transactions. |
Not applicable.
(d) Exhibits.
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Exhibit No. |
Description |
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Asset Purchase Agreement, dated as of February 26, 2018, by and among DKL Big Spring, LLC, Delek US Holdings, Inc., Alon USA Partners, LP, Alon USA GP II, LLC, Alon USA Delaware, LLC, Alon USA Refining, LLC, and Alon USA, LP.
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* Certain schedules have been omitted to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule will be furnished supplementally to the SEC upon request.
Delek Logistics Partners, LP ExhibitEX-2.1 2 dk_dklbigspringconformedas.htm EXHIBIT 2.1 DK_DKL BIG SPRING CONFORMED ASSET PURCHASE AGREEMENT 3.2.18 Exhibit Execution VersionExhibit 2.1ASSET PURCHASE AGREEMENT(Big Spring Refinery Logistics Assets and Duncan Terminal)amongAlon USA Partners,…To view the full exhibit click here
About Delek Logistics Partners, LP (NYSE:DKL)
Delek Logistics Partners, LP owns and operates logistics and marketing assets for crude oil, and intermediate and refined products. The Company’s business primarily consists of certain crude oil, intermediate and refined products pipelines and transportation, storage, wholesale marketing, terminaling and offloading assets, which were previously owned, operated or held by Delek US Holdings, Inc. (Delek), and assets acquired from unrelated third parties. The Company operates through two segments: Pipelines and Transportation segment, and Wholesale Marketing and Terminalling segment. The Company engaged in the gathering, transporting and storing crude oil; storing intermediate products and feed stocks, and marketing, distributing, transporting and storing refined products. The Company also provides crude oil, intermediate and refined products transportation services for terminaling, and marketing services to third parties primarily in Texas, Tennessee and Arkansas.
