For Washington, D.C.-based ACON Investments, it would be the firm's first investment in downstream assets, according to a report by The Wall Street Journal. The firm has previously invested in oil and gas exploration, said the report, with deals including Milagro Exploration and Mariner Energy.
"It's an interesting sector, an attractive niche market," ACON Investments founder and managing partner Bernard Aronson told the newspaper.
The transaction teams up three closely connected entities in Acon, NTR and TPG. Acon and TPG have had a long relationship and TPG Co-Founder David Bonderman has served on Acon's investment committee, the report said.
Founded in 1996, ACON Investments is a private-equity investment firm focused on United States and Latin America with more than $1.5 billion of capital under management, according to its website. It pursues a theme-based investment strategy by focusing on industries and businesses at key inflection points in their development and pursues these opportunities in close partnership with established management teams.
NTR's origins stem from the special-purpose acquisition company NTR Acquisition, which raised about $245.6 million in 2007. The SPAC planned to buy Kern Oil & Refining Co. for $286.5 million but later terminated the deal. After its investment period expired and the SPAC dissolved in early 2009, the principals behind NTR teamed up with Acon to form NTR Partners, and continued to pursue a refining asset.
The leadership of NTR is made up of refinery business veterans including William Hantke and former banker Mario Rodriguez, said the report.
TPG Capital, formerly known as Texas Pacific Group, is a leading global private-investment firm with $48 billion of capital under management across a family of funds, according to its website. Founded in 1992, it provides investment insight and value-added operating capabilities to companies undergoing change, as well as dealing with distressed companies. It invests in companies across a broad range of industries and geographies.
The decision by Marathon Oil to sell the upper Midwest assets to the private-equity firms was simply another chapter in the company's efforts at rationalizing its assets to provide capital for investments on the downstream and upstream, Marathon Oil spokesperson Robert Calmus told CSP Daily News.
"On an on-going basis.... Marathon reviews its asset portfolio, and we want to make sure the assets are fully aligned with the company's business plans," he said. "As part of the review, we determined a sale of the downstream assets in Minnesota would do two things: One, it would enable us to capture the true value of these assets by selling them as a package, not just a refinery or c-stores. Secondly, it would enable us to redeploy the proceeds of this potential sale into growth projects that are more in line with our long-term business plans."
Calmus could not comment on how the sale developed or whether there were other potential buyers for the assets, only noting, "The market value is enhanced by being a complete package."
Marathon has been focusing on its upstream projects and viewed the Minnesota assets as noncore, a person familiar with the deal told the Journal. Additionally, the gas stations were a captive customer of the refinery making the package of assets tightly connected to each other, the source said.
Caris & Co. Managing Director Ann Kohler told the paper that the Minnesota assets were largely separated geographically from the rest of Marathon's refining assets in the mid-continent region.
(Click here for previous CSP Daily News coverage.)
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