BRENTWOOD, Tenn. -- In a move that will simplify its corporate structure and reduce costs, Delek U.S. Holdings Inc. has closed the acquisition of the remaining outstanding units of Alon USA Partners LP in an all-stock transaction.
Under the terms of the merger agreement, the owners of the outstanding common units in Alon Partners that Delek U.S. and its affiliates do not currently own will receive a fixed exchange ratio of 0.49 Delek U.S. shares for each common unit of Alon Partners. Prior to this transaction, Delek U.S. and its affiliates owned approximately 51 million common units of Alon Partners, or approximately 81.6% of the outstanding units. Following the closing, Delek U.S. has approximately 84.1 million shares outstanding.
In November 2016, Delek U.S. sold its 350 c-stores in Tennessee, Alabama, Georgia, Arkansas, Virginia, Kentucky and Mississippi to Santiago, Chile-based Compania de Petroleos de Chile COPEC SA (COPEC) for $535 million and MAPCO’s estimated cash on hand and working capital adjustment, totaling $16.3 million. Those stores operate under the MAPCO Express, MAPCO Mart, East Coast, Fast Food and Fuel, Favorite Markets, Delta Express and Discount Food Mart names.
Seven months later, Delek U.S. took ownership of Alon USA Energy Inc., becoming the largest 7-Eleven licensee in the United States, operating approximately 300 c-stores in central and West Texas and New Mexico.
“We are excited to complete this strategic initiative following the acquisition of Alon USA on July 1, 2017,” said Uzi Yemin, chairman, president and CEO of Delek U.S. “It simplifies the corporate structure of Delek U.S. and should reduce public company costs. … For Alon Partners public unitholders, the transaction gives them ownership in a larger, more diverse organization.
“This step should move us toward capturing the cost of capital synergies as we utilize the balance sheet of Delek U.S. to refinance high cost debt at Alon Partners," he said. "Also, it should allow us to efficiently drop down logistics assets to Delek Logistics Partners in the future.”
Brentwood, Tenn.-based Delek U.S. is a diversified downstream energy company with assets in petroleum refining, logistics, asphalt, renewable fuels and convenience-store retailing.
The refining assets consist of refineries operated in Tyler and Big Spring, Texas; El Dorado, Ark.; and Krotz Springs, La.
The logistics operations consist of Delek Logistics Partners LP. Delek and its affiliates also own approximately 63% (including the 2% general partner interest) of Delek Logistics Partners LP, a master limited partnership focused on owning and operating midstream energy infrastructure assets.