SPRAGUE RESOURCES LP (NYSE:SRLP) Files An 8-K Entry into a Material Definitive Agreement

SPRAGUE RESOURCES LP (NYSE:SRLP) Files An 8-K Entry into a Material Definitive Agreement

Story continues below

Item 1.01. Entry into a Material Definitive Agreement.

On January 24, 2017, Sprague Operating Resources LLC (“Sprague”),
a wholly owned subsidiary of Sprague Resources LP, entered into an
Asset Purchase Agreement (the “Agreement”) with Capital
Properties, Inc., Dunellen, LLC and Capital Terminal Company
(collectively, “Capital”) to acquire Capital’s East Providence,
Rhode Island refined product terminal assets (the “Purchased
Assets”). Terms used but not otherwise defined herein are used as
defined in the Asset Purchase Agreement.
The aggregate purchase price for the Purchased Assets will be
Twenty-Three Million Dollars ($23,000,000.00) plus the assumption
of the Assumed Liabilities. The purchase price shall be subject to
adjustment to the terms of the Agreement.
Each of the parties has agreed to certain customary
representations, warranties and covenants in the Agreement. The
consummation of the transaction is subject to the satisfaction or
waiver of customary conditions, as set forth in the Agreement,
including, among other things, receipt of third party and any
applicable regulatory approvals.
The Agreement may be terminated at any time prior to the Closing
under a number of conditions that include, but are not limited to,
the following: (i) by mutual written agreement of the parties; (ii)
by Sprague if there is an event or condition that results in a
Material Adverse Effect, Capitals representations and warranties,
subject to certain materiality qualifiers, were not true and
correct when made, Capital has not performed or complied with the
covenants or agreements to be performed or complied with by
Capital, or certain bankruptcy-type events occur with respect to
Capital; (iii) by Capital if Spragues representations and
warranties, subject to certain materiality qualifiers, were not
true and correct when made, Sprague has not performed or complied
with the covenants or agreements to be performed or complied with
by Sprague, or certain bankruptcy-type events occur with respect to
Sprague; (iv) by either party if the Closing has not occurred
before January 31, 2017, provided however, this termination right
is not available to any party whose failure to comply with the
Agreement was the cause of, or resulted in, the failure of the
Closing to occur on or before such date; (v) by either party if the
transactions contemplated by the Agreement become illegal or are
prohibited by law; (vi) assuming certain conditions to Closing have
been satisfied, by either Buyer or Seller if the other party fails
to consummate the transactions contemplated by the Agreement in
accordance with Section 2.05; or (vii) by Buyer to the terms of
Section 5.04(b).
A copy of the Agreement is attached hereto as Exhibit 2.1 and a
copy of the press release of Sprague Resources LP regarding the
Agreement is attached hereto as Exhibit 99.1. Each of the foregoing
exhibits is incorporated herein by reference. The description of
the Agreement contained in this Current Report on Form 8-K is
qualified in its entirety by reference to the full text of the
Agreement.
The Agreement has been included to provide security holders with
information regarding its terms. These Agreement is not intended to
provide any other factual information about the parties thereto.
The representations,
warranties and covenants contained in the Agreement were made
solely for purposes of the Agreement and as of specific dates, are
solely for the benefit of the parties to the Agreement, and may be
subject to limitations agreed upon by the contracting parties,
including being qualified by confidential disclosures made for the
purposes of allocating contractual risk between the parties to the
Agreement instead of establishing these matters as facts, and may
be subject to standards of materiality applicable to the
contracting parties that differ from those applicable to security
holders. Security holders are not third-party beneficiaries under
the Agreement and should not rely on the representations,
warranties and covenants or any descriptions thereof as
characterizations of the actual state of facts or condition of the
parties thereto. Moreover, information concerning the subject
matter of the representations and warranties may change after the
date of the Agreement which subsequent information may or may not
be fully reflected in Sprague Resources LPs public disclosures.
Item 7.01 Regulation FD Disclosure.
Beginning on January 25, 2017, Sprague Resources LP will be sharing
a presentation with its investors highlighting key points
associated with Capital’s East Providence, Rhode Island refined
product terminal assets. The presentation will be posted to the
Investor Relations section of Sprague Resources LP’s website,
www.spragueenergy.com. A copy of the presentation is furnished
herewith as Exhibit 99.2 and incorporated herein by reference in
its entirety.
The information in this Item 7.01 and in Exhibit 99.2 attached to
this Current Report on Form 8-K shall not be deemed filed for
purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the Exchange Act), nor shall this Item 7.01, such Exhibit
99.2 or any of the information contained herein or therein be
deemed incorporated by reference in any filing under the Exchange
Act or the Securities Act of 1933, as amended, except as shall be
expressly set forth by specific reference in such filing.
Cautionary Note Regarding Forward-Looking Statements
Any statements in this Current Report on Form 8-K or press release
about future expectations, plans and prospects for Sprague
Resources LP, including statements about the expected timetable for
consummation of the proposed transaction, and any other statements
about Sprague Resources LP, or about Sprague Resources LPs future
expectations, beliefs, goals, plans or prospects, constitute
forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934. Any statements that are not
statements of historical fact (including statements containing the
words believes, plans, anticipates, expects, estimates and similar
expressions) should also be considered forward-looking statements.
A number of important factors could cause actual results or events
to differ materially from those indicated by such forward-looking
statements, including the parties ability to consummate the
transaction; the conditions to the completion of the transaction,
including the receipt of certain consents required in connection
with the transaction which may not be obtained on the terms
expected or on the anticipated schedule; the parties ability to
meet expectations regarding the timing, completion and accounting
and tax treatments of the transaction; the possibility that the
parties may be unable to achieve expected synergies and operating
efficiencies within the expected time-frames or at all or be unable
to successfully integrate Capital’s operations into those of
Sprague;
the possibility that the integration of Capital into Sprague may be
more difficult, time consuming or costly than expected; resulting
increases in operating costs, customer loss and business disruption
(including, without limitation, difficulties in maintaining
relationships with employees, customers or suppliers); and, the
ability of Sprague Resources GP LLC to retain certain key employees
of Capital. Other applicable risks and uncertainties related to our
business have been described more fully in Sprague Resources LPs
most recent Annual Report on Form 10-K filed with the U.S.
Securities and Exchange Commission (SEC) on March 10, 2016, and in
subsequent Form 10-Q and Form 8-K filings, and other documents
filed with the SEC. Sprague undertakes no obligation and does not
intend to update any forward-looking statements to reflect new
information or future events. You are cautioned not to place undue
reliance on these forward-looking statements, which speak only as
of the date of this press release.
Non-GAAP Measures
To supplement the financial information presented in accordance
with United States generally accepted accounting principles (GAAP),
Sprague Resources LPs management uses certain non-GAAP financial
measurements. You can find disclosures on our use of these non-GAAP
measures, as well as reconciliations between GAAP and these
non-GAAP measures, in Sprague Resources LP’s “Non-GAAP Measures
Quarterly Supplement” located in the Investor Relations section of
our website, www.spragueenergy.com.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
EXHIBIT
DESCRIPTION
2.1
Asset Purchase Agreement, dated January 24, 2017, by
and among Capital Properties, Inc., Dunellen, LLC,
Capital Terminal Company and Sprague Operating
Resources LLC.*
99.1
Press Release of Sprague Resources LP dated January 25,
2017
99.2
Sprague Resources LP – Capital Terminal Transaction
presentation dated January 25, 2017
*
to Item 601(b)(2) of Regulation S-K promulgated by the
SEC, certain schedules to the Asset Purchase Agreement
have been omitted. The registrant hereby agrees to
furnish supplementally to the SEC, upon its request,
any or all omitted schedules.
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.
SPRAGUE RESOURCES LP
By:
Sprague Resources GP LLC, its General Partner
By:

/s/ Paul A. Scoff
Paul A. Scoff
Vice President, General Counsel, Chief Compliance Officer
and Secretary
Dated: January 25, 2017
EXHIBIT INDEX
EXHIBIT
DESCRIPTION
2.1
Asset Purchase Agreement, dated January 24, 2017, by
and among Capital Properties, Inc., Dunellen, LLC,
Capital Terminal Company and Sprague Operating
Resources LLC.*
99.1
Press Release of Sprague Resources LP dated January 25,
2017
99.2
Sprague Resources LP – Capital Terminal Transaction
presentation dated January 25, 2017
*


About SPRAGUE RESOURCES LP (NYSE:SRLP)

Sprague Resources LP is engaged in the purchase, storage, distribution and sale of refined products and natural gas, and provides storage and handling services for a range of materials. The Company operates through four segments: refined products, natural gas, materials handling and other operations. Its refined products segment purchases a range of refined products, such as heating oil, diesel fuel, residual fuel oil, asphalt, kerosene, jet fuel and gasoline from refining companies, trading organizations and producers, and sells them to its customers. Its natural gas segment purchases, sells and distributes natural gas to commercial and industrial customers in the Northeast and Mid-Atlantic United States. Its materials handling segment offloads, stores and prepares for delivery a range of customer-owned products, including asphalt, clay slurry, salt and gypsum. The Company’s other operations segment includes sale of coal and commercial trucking activity.

SPRAGUE RESOURCES LP (NYSE:SRLP) Recent Trading Information

SPRAGUE RESOURCES LP (NYSE:SRLP) closed its last trading session up +0.90 at 27.10 with 51,675 shares trading hands.

An ad to help with our costs