BRENTWOOD, Tenn. --Delek US Holdings Inc. has announced that it has completed the acquisition of approximately 33.7 million shares, or approximately 48% of the outstanding shares, of Alon USA Energy Inc. common stock from Alon Israel Oil Co. Ltd.
“We are pleased to have completed this transaction quickly and would like to thank the management teams of both Alon Israel and Alon USA for their support during this process,” Uzi Yemin, chairman, president and CEO of Delek US, said. “In addition, through the backing of our lenders, we were able to finance this transaction in a timely manner. This acquisition is an exciting strategic step for us as it broadens our asset diversity, and we look forward to working with Alon USA’s board of directors and management team in the future.”
Five seats on the 11-member Alon USA board previously held by Alon Israel representatives have been filled by representatives from Delek US. This includes Delek US chairman, president and CEO Uzi Yemin, who has been named as the chairman of the Alon USA board.
Prior to commencing negotiations with Alon Israel, Delek US entered into a stockholder agreement with Alon USA. During the first year following the closing of this transaction, the stockholder agreement allows Delek US to acquire up to 49.99% of the outstanding shares of Alon USA at its discretion, with additional ownership above this threshold subject to the approval of the independent members of Alon USA’s board. The stockholder agreement will expire on May 14, 2016, and Delek US will then have no further restrictions under this agreement related to increasing ownership in Alon USA.
The consideration paid by Delek US to acquire the Alon USA common stock consists of the issuance of six million shares of restricted Delek US common stock to Alon Israel; an unsecured $145 million promissory note with an interest rate of 5.5% payable to Alon Israel, which matures in January 2021; and $200 million of cash. Within two years of the closing of this transaction, an additional 200,000 shares of Delek US common stock may be issued to Alon Israel under certain circumstances as outlined in the stock purchase agreement with Alon Israel.
The approximate value of the transaction consideration is $564.5 million based upon a closing price of $36.59 per share of Delek US common stock on May 13, 2015.
Brentwood, Tenn.-based Delek US is a diversified downstream energy company with assets in petroleum refining, logistics and convenience-store retailing. The refining segment consists of refineries operated in Tyler, Texas, and El Dorado, Ark. Delek US and its affiliates own approximately 62% (including the 2% general partner interest) of Delek Logistics Partners LP, a master limited partnership (MLP) focused on owning and operating midstream energy infrastructure assets. The retail segment markets fuel and merchandise through a network of approximately 360 company-operated convenience stores operated under the MAPCO Express, MAPCO Mart, East Coast, Fast Food & Fuel, Favorite Markets, Delta Express and Discount Food Mart brand names.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.