SEMGROUP CORPORATION (NYSE:SEMG) Files An 8-K Entry into a Material Definitive Agreement

SEMGROUP CORPORATION (NYSE:SEMG) Files An 8-K Entry into a Material Definitive Agreement

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Item1.01

Entry into a Material Definitive Agreement

Purchase and Sale Agreement

On June5, 2015, SemGroup Corporation, a Delaware corporation (the
Company) entered into a purchase and sale agreement (the
Purchase Agreement), to which the Company has agreed to
indirectly acquire 50% of the equity interests in Buffalo Parent
Gulf Coast Terminals LLC, a Delaware limited liability company
(BPGCT), the parent company of Buffalo Gulf Coast
Terminals LLC, a Delaware limited liability company and Houston
Fuel Oil Terminal Company LLC, a Delaware limited liability
company (HFOTCO), in exchange for a purchase price to be
paid by the Buyers (defined below) to the Sellers (defined below)
in two payments (the Transaction). The first payment will
occur at the closing of the Transaction (the Closing), and
consists of aggregate consideration of $1.5billion, subject to
customary adjustments for working capital, net indebtedness and
capital expenditures as of Closing, which amount will be composed
of assumed indebtedness at HFOTCO (currently expected to be
approximately $785 million), between $300million and $400million
in the form of shares of the Companys ClassA common stock, par
value $0.01 per share (the ClassA Common Stock),
priced at $32.30 per share, and the remainder in cash. The second
payment will be paid on or prior to December31, 2018, and
consists of $600million of cash if paid prior to December31,
2018, which amount is discounted at a rate of 5% per annum if
paid prior to December31, 2018, and increases to $680million if
not paid by December31, 2018, but which amount must be paid any
time after December31, 2018 upon the written request of Sellers
and, in any event, not later than December31, 2019 (the Second
Payment
). The Company entered into the Purchase Agreement
with Beachhead I LLC, a Delaware limited liability company
(Buyer I), Beachhead II LLC, a Delaware limited liability
company (Buyer II and, together with Buyer I,
Buyers), which are each indirect wholly-owned subsidiaries
of the Company, Buffalo Investor I, L.P., a Delaware limited
partnership (Buffalo I), Buffalo Investor II, L.P., a
Delaware limited partnership (Buffalo II and, together
with Buffalo I, the Sellers).

Neither the Company nor any of the subsidiaries of the Company
other than BPGCT, Buyers and Beachhead Holdings LLC, a Delaware
limited liability company and the parent company of the Buyers
(collectively, the Guarantors), will have any obligation
to pay the Second Payment to Sellers. Instead, the Second Payment
will be secured by a pledge of the equity interests in BPGCT and
Buyers in favor of Sellers. Prior to the payment of the Second
Payment, the Guarantors will agree to certain customary covenants
and events of default in a Guarantee, Pledge and Security
Agreement to be entered into at Closing, a form of which is
attached as an exhibit to the Purchase Agreement, and include
corresponding customary special purpose and separateness
covenants in the organizational documents of BPGCT and Buyers. In
the event the Second Payment is not paid when due, the Sellers
have the right to force the sale of Buyers and BPGCT to satisfy
the Second Payment.

The Purchase Agreement contains customary representations and
warranties by the parties. In addition, the parties have agreed
to covenants relating to, among other things, (i)the conduct of
its business during the interim period between the execution of
the Purchase Agreement and the Closing, (ii)the obligation to use
reasonable best efforts to cause the Transaction to be
consummated and to obtain expiration of the waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (HSR Act), and (iii)the obligation of the Company
to consummate a backstop financing commitment.

The completion of the Transaction is subject to satisfaction or
waiver of certain closing conditions, including but not limited
to: (i)the absence of any law, order, decree or injunction
prohibiting the consummation of the Transaction , (ii) the
expiration or termination of any waiting period under the HSR
Act, (iii)subject to specified materiality standards, the
accuracy of the representations and warranties of each party,
(iv)compliance by each party in all material respects with its
covenants, (v)the absence of Uncured Casualty Losses (as defined
in the Purchase Agreement) that are reasonably expected to
require expenditures, individually or in the aggregate, in excess
of $100million after Closing, (vi)certain identified third party
consents being obtained by Sellers and (vii)the absence of a
Material Adverse Effect (as defined in the Purchase Agreement)
during the interim period between the date of execution of the
Purchase Agreement and Closing.

Each party has agreed to indemnify the other for breaches of
representations and warranties, breaches of covenants and certain
other matters, subject to certain exceptions and limitations.
Subject to the satisfaction of the closing conditions and
regulatory approval, the Transaction is expected to close in the
third quarter of 2017. The foregoing description of the Purchase
Agreement is only a summary, does not purport to be complete and
is subject to, and qualified in its entirety by reference to, the
Purchase Agreement, a copy of which is filed as Exhibit 2.1 to
this Current Report on Form8-Kand incorporated herein by
reference.

In connection with the Closing, the Company and the Sellers will
enter into aRegistration RightsAgreement that will grant the
Sellers certain customaryregistration rightsfor shares of ClassA
Common Stock issued by the Company as consideration to the
Purchase Agreement.

Item3.02 Unregistered Sales of Equity Securities.

to the Purchase Agreement, the Company intends to issue between
$300million and $400million of shares of its ClassA Common Stock,
priced at $32.30 per share, to the Sellers at Closing. The shares
of ClassA Common Stock described in this Item3.02 will be issued
in reliance upon the exemption from the registration requirements
of the Securities Act of 1933, as amended (the Securities
Act
), provided by Section4(a)(2) of the Securities Act as
sales by an issuer not involving any public offering.

The information set forth in Item1.01 with respect to the
Transaction is incorporated herein by reference.

Item7.01 Regulation FD Disclosure

On June6, 2017, the Company issued a press release announcing the
Transaction. A copy of the press release is attached hereto as
Exhibit 99.1 and is incorporated herein by reference.

The information furnished to this Item7.01 and Exhibit 99.1 shall
not be deemed to be filed for purposes of Section18 of the
Securities Exchange Act of 1934, as amended (the Exchange
Act
), or otherwise subject to the liabilities of that
Section, nor shall it be deemed incorporated by reference in any
filing under the Securities Act or the Exchange Act, except as
shall be expressly set forth by specific reference in such a
filing.

Item9.01 Financial Statements and Exhibits
(d) Exhibits

The following exhibits are furnished herewith.

Exhibit Number

Description

2.1 Purchase and Sale Agreement by and among SemGroup
Corporation, Beachhead I LLC, Beachhead II LLC, Buffalo
Investor I, LP and Buffalo Investor II, LP, dated as of
June5, 2017.*
99.1 Press Release dated June6, 2017, issued by SemGroup
Corporation.
* Schedules and exhibits have been omitted to Item 601(b)(2) of
Regulation S-K. The Company hereby undertakes to furnish
supplementally copies of any of the omitted schedules or
exhibits upon request by the U.S. Securities and Exchange
Commission; provided, however, that the Company may request
confidential treatment to Rule 24b-2 of the Exchange Act for
any schedules or exhibits so furnished.

to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.

SEMGROUP CORPORATION
Date: June6, 2017 By:

/s/ William H. Gault

Name: William H. Gault
Title: Secretary

EXHIBIT INDEX

Exhibit Number

Description

2.1 Purchase and Sale Agreement by and among SemGroup
Corporation, Beachhead I LLC, Beachhead II LLC, Buffalo
Investor I, LP and Buffalo Investor II, LP, dated as of
June5, 2017.*
99.1 Press Release dated June6, 2017, issued by SemGroup
Corporation.
* Schedules and exhibits have been omitted to Item 601(b)(2) of
Regulation S-K. The Company hereby undertakes to furnish
supplementally copies of any of the omitted schedules or
exhibits upon request by the U.S. Securities and Exchange
Commission; provided, however, that the Company may request
confidential treatment


About SEMGROUP CORPORATION (NYSE:SEMG)

SemGroup Corporation is a provider of gathering, transportation, storage, distribution, marketing and other midstream services. The Company’s segments include Crude Transportation, which operates crude oil pipelines and truck transportation businesses in the United States; Crude Facilities, which operates crude oil storage and terminal businesses in the United States; Crude Supply and Logistics, which operates a crude oil marketing business; SemLogistics, which owns an independent petroleum products storage facility in the United Kingdom; SemCAMS, which owns and operates over four natural gas processing and gathering facilities in Alberta, Canada; SemMexico, which provides a range of liquid asphalt cement products and product application services to the Mexican market; SemGas, which provides natural gas gathering and processing services, and SemStream, which owns interest in NGL Energy Partners LP and NGL Energy Holdings LLC.

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