DALLAS--(BUSINESS WIRE)--
Holly Energy Partners, L.P. (NYSE:HEP) ("Holly Energy") today announced
it has entered into definitive agreements to acquire a 50% interest in
Frontier Aspen LLC ("Frontier"), the owner of the Frontier Aspen
Pipeline, and a 75% interest in the SLC Pipeline LLC ("SLC"), the owner
of the Salt Lake City Pipeline, from affiliates of Plains All American
Pipeline, L.P. (NYSE:PAA) ("Plains") for an aggregate purchase price of
$250 million in cash. Holly Energy currently owns 50% of Frontier and
25% of SLC. As a result, following the transactions, SLC and Frontier
will be wholly-owned subsidiaries of Holly Energy. The Frontier Aspen
Pipeline is a 289-mile crude pipeline from Casper, Wyoming to Frontier
Station, Utah that supplies Canadian and Rocky Mountain crudes to Salt
Lake City area refiners through a connection to the SLC Pipeline. The
Salt Lake City Pipeline is a 95-mile crude pipeline that transports
crude oil into the Salt Lake City area from the Utah terminal of the
Frontier Pipeline and from Wahsatch station. The acquired interest in
both pipelines is expected to generate approximately $23 million in
annual forecasted EBITDA.
The transactions are subject to customary closing conditions, including
expiration of the Hart-Scott Rodino antitrust waiting period for the
acquisition of the 75% interest in SLC. Additionally, the closing of
each transaction is conditioned on the closing of the other transaction.
Holly Energy expects to finance the transaction with a combination of
debt and equity, subject to market conditions and other factors. In
addition, the general partner of Holly Energy has agreed to waive its
incentive distribution rights for a period of three years following the
closing of the acquisitions on any new units issued in connection with
the financing of the acquisitions. Holly Energy anticipates the
acquisitions will be immediately accretive to its unitholders.
About Holly Energy Partners, L.P.:
Holly Energy Partners, L.P., headquartered in Dallas, Texas, provides
petroleum product and crude oil transportation, terminalling, storage
and throughput services to the petroleum industry, including
HollyFrontier Corporation subsidiaries. The Partnership, through its
subsidiaries and joint ventures, owns and/or operates petroleum product
and crude gathering pipelines, tankage and terminals in Texas, New
Mexico, Arizona, Washington, Idaho, Oklahoma, Utah, Nevada, Wyoming and
Kansas as well as refinery processing units in Kansas and Utah.
Holly Energy Forward-Looking Statement:
The statements in this press release relating to matters that are not
historical facts are "forward-looking statements" within the meaning of
the federal securities laws. These statements are based on our beliefs
and assumptions and those of our general partner using currently
available information and expectations as of the date hereof, are not
guarantees of future performance and involve certain risks and
uncertainties. Although we and our general partner believe that such
expectations reflected in such forward-looking statements are
reasonable, neither we nor our general partner can give assurance that
our expectations will prove to be correct. Therefore, actual outcomes
and results could materially differ from what is expressed, implied or
forecast in these statements. Any differences could be caused by a
number of factors including, but not limited to:
-
our failure to successfully close the transactions with Plains, or,
once closed, integrate the operation of the SLC Pipeline and/or
Frontier Pipeline with our existing operations;
-
failure to receive required governmental approvals to close the
transactions with Plains;
-
risks and uncertainties with respect to the actual quantities of
petroleum products and crude oil shipped on our pipelines and/or
terminalled, stored and throughput in our terminals;
-
the economic viability of HollyFrontier Corporation, Alon USA, Inc.
and our other customers;
-
the demand for refined petroleum products in markets we serve;
-
our ability to purchase and integrate future acquired operations;
-
our ability to complete previously announced or contemplated
acquisitions;
-
the availability and cost of additional debt and equity financing,
including to finance the transactions with Plains;
-
the possibility of reductions in production or shutdowns at refineries
utilizing our pipeline and terminal facilities;
-
the effects of current and future government regulations and policies;
-
our operational efficiency in carrying out routine operations and
capital construction projects;
-
the possibility of terrorist attacks and the consequences of any such
attacks;
-
general economic conditions; and
-
other financial, operations and legal risks and uncertainties detailed
from time to time in our Securities and Exchange Commission filings.
The forward-looking statements speak only as of the date made and, other
than as required by law, we undertake no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
Use of Non-GAAP Financial Information:
This news release includes the term forecasted EBITDA. This is a
non-GAAP financial measure. Forecasted EBITDA is based on Holly Energy's
projections for the acquired interests in SLC and Frontier. Forecasted
EBITDA is included to help facilitate comparisons of operating
performance of Holly Energy with other companies in its industry, as
well as help facilitate an assessment of the projected ability of the
acquired interests in SLC and Frontier to generate sufficient cash flow
to make distributions to Holly Energy's partners. Forecasted EBITDA is
not presented as an alternative to the nearest GAAP financial measure,
net income, and should not be considered in isolation or as a substitute
for measures of performance prepared in accordance with GAAP. Holly
Energy is unable to present a reconciliation of forecasted EBITDA to net
income because certain elements of net income for future periods,
including interest, depreciation and taxes, are not available without
unreasonable efforts. Together, these items generally would result in
EBITDA being significantly greater than net income.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170810006075/en/
Holly Energy Partners, L.P.
Craig Biery, 214-954-6511
Director,
Investor Relations
or
Jared Harding, 214-954-6511
Investor
Relations
Source: Holly Energy Partners, L.P.
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