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

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Item 1.01. Entry into a Material Definitive Agreement.

On January 23, 2017, Sprague Operating Resources LLC (“Sprague”),
a wholly owned subsidiary of Sprague Resources LP, entered into a
Terminal and Wholesale Fuels Asset Purchase Agreement (“Asset
Purchase Agreement”) with Leonard E. Belcher, Incorporated (“L.E.
Belcher”) for the purchase of refined product terminal assets in
Springfield, Massachusetts. Terms used but not otherwise defined
herein are used as defined in the Asset Purchase Agreement.
The aggregate purchase price for the Assets will be (i) Twenty
Million Dollars ($20,000,000) plus (ii) the Inventory Value
calculated and adjusted to the terms of the Asset Purchase
Agreement.
Each of the parties has agreed to certain customary
representations, warranties and covenants in the Asset Purchase
Agreement. The consummation of the transaction is subject to the
satisfaction or waiver of customary conditions, as set forth in the
Asset Purchase Agreement, including, among other things, receipt of
third party and any applicable regulatory approvals.
The Asset Purchase Agreement may be terminated at any time prior to
the Closing by mutual written agreement of the parties; by Sprague
if any of the conditions in Section 5 are not fulfilled by February
28, 2017; by L.E. Belcher if any of the conditions in Section 6 are
not fulfilled by February 28, 2017; or, by the Buyer or the Seller
if the transactions contemplated by the Asset Purchase Agreement
become illegal or are prohibited by law. If the conditions set
forth in Section 5 of the Asset Purchase Agreement have been
satisfied or waived and Sprague terminates the Asset Purchase
Agreement prior to the Closing, L.E. Belcher shall be entitled to a
deposit of One Million Dollars ($1,000,000).
A copy of the Asset Purchase Agreement is attached hereto as
Exhibit 2.1 and a copy of the press release of Sprague regarding
the Asset Purchase Agreement is attached hereto as Exhibit 99.1.
Each of the foregoing exhibits is incorporated herein by reference.
The descriptions of the Asset Purchase Agreement contained in this
Current Report on Form 8-K is qualified in its entirety by
reference to the full text of the Asset Purchase Agreement.
The Asset Purchase Agreement has been included to provide security
holders with information regarding its terms. These Asset Purchase
Agreement is not intended to provide any other factual information
about the parties thereto. The representations, warranties and
covenants contained in the Asset Purchase Agreement were made
solely for purposes of the Asset Purchase Agreement and as of
specific dates, were solely for the benefit of the parties to the
Asset Purchase 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 Asset Purchase
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 Asset Purchase 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 Asset Purchase Agreement which subsequent information may or
may not be fully reflected in Spragues public disclosures.
Item 7.01 Regulation FD Disclosure.
Beginning on January 24, 2017, Sprague will be sharing a
presentation with its investors highlighting key points associated
with the L.E. Belcher assets. The presentation will be posted to
the Investor Relations section of Sprague’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 L.E. Belcher’s operations into those of
Sprague; the possibility that the integration of L.E. Belcher 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 L.E. Belcher. Other applicable risks and uncertainties
related to our business have been described more fully in Sprague
Resources LP’s 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 Resources LP 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
Sprague Resources LPs website, www.spragueenergy.com.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
EXHIBIT
DESCRIPTION
2.1
Terminal and Wholesale Fuels Asset Purchase Agreement,
dated January 23, 2017, by and between Leonard E.
Belcher Incorporated and Sprague Operating Resources
LLC.*
99.1
Press Release of Sprague Resources LP dated January 24,
2017
99.2
Sprague Resources LP – Investor Slides dated January
24, 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 24, 2017
EXHIBIT INDEX
EXHIBIT
DESCRIPTION
2.1
Terminal and Wholesale Fuels Asset Purchase Agreement,
dated January 23, 2017, by and between Leonard E.
Belcher Incorporated and Sprague Operating Resources
LLC.*
99.1
Press Release of Sprague Resources LP dated January 24,
2017
99.2
Sprague Resources LP – Investor Slides dated January
24, 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 +0.09 at 27.19 with 51,675 shares trading hands.

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