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4-Traders Homepage  >  Equities  >  Nyse  >  Valero Energy Partners LP    VLP

Delayed Quote. Delayed  - 08/26 03:30:39 pm
42.5899 USD   +2.16%
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Valero Energy Partners LP : Announces Acquisition of the Meraux and Three Rivers Terminal Services Business for $325 Million

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08/23/2016 | 03:09pm CEST

(GlobeNewswire) - Valero Energy Partners LP (NYSE:VLP) (the Partnership) today announced that the board of directors of its general partner has approved the Partnerships acquisition of the Meraux and Three Rivers Terminal Services Business from a subsidiary of Valero Energy Corporation (NYSE:VLO) (Valero) for total consideration of approximately $325 million. In its first twelve months of operation, the business to be acquired is expected to contribute approximately $25million of net income and approximately $39 million of earnings before interest, taxes, depreciation, and amortization (EBITDA). The transaction is expected to close effective September 1, 2016.

With this next step in our growth strategy, were expanding our U.S. Gulf Coast footprint and achieving our acquisition target for the year, said Joe Gorder, Chief Executive Officer of VLPs general partner. With solid operations, a strong balance sheet, and our supportive sponsor, we remain well-positioned to deliver annual distribution growth of 25percent for 2016 and 2017.

The business to be acquired includes terminals that support Valeros Meraux and Three Rivers refineries. The Meraux assets consist of 24 tanks with 3.9 million barrels of storage capacity for crude oil, intermediates, and refined petroleum products. The Three Rivers assets consist of 62 tanks with 2.25 million barrels of storage capacity for crude oil, intermediates, and refined petroleum products.

The Partnership expects to finance the $325 million acquisition with borrowings under its revolving credit facility, cash on hand, and the issuance of additional common units and general partner units to Valero subsidiaries. The newly issued units will be allocated in a proportion allowing the general partner to maintain its 2 percent general partner interest.

Upon closing, the Partnership plans to enter into 10-year terminaling agreements with a subsidiary of Valero. The agreements are expected to include minimum volume commitments covering approximately 85 percent of planned throughput.

The terms of the transaction were approved, subject to the execution of definitive documentation, by the board of directors of the general partner, following the approval and recommendation of the boards conflicts committee. The conflicts committee is composed of independent directors and was advised by Evercore Group L.L.C., its financial advisor, and Akin Gump Straus Hauer & Feld LLP, its legal counsel.

About Valero Energy Partners LPValero Energy Partners LP is a fee-based master limited partnership formed by Valero Energy Corporation to own, operate, develop and acquire crude oil and refined petroleum products pipelines, terminals, and other transportation and logistics assets. With headquarters in San Antonio, the Partnerships assets include crude oil and refined petroleum products pipeline and terminal systems in the Gulf Coast and Mid-Continent regions of the United States that are integral to the operations of nine of Valeros refineries. Please visit www.valeroenergypartners.comfor more information.

ContactsInvestors: John Locke, Vice President Investor Relations, 210-345-3077Karen Ngo, Manager Investor Relations, 210-345-4574Media: Lillian Riojas, Director Media Relations and Communications, 210-345-5002

Safe-Harbor StatementThis release contains forward-looking statements within the meaning of federal securities laws. These statements discuss future expectations, contain projections of results of operations or of financial condition or state other forward-looking information. You can identify forward-looking statements by words such as anticipate, believe, estimate, expect, forecast, project, could, may, should, would, will or other similar expressions that convey the uncertainty of future events or outcomes. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the Partnerships control and are difficult to predict. These statements are often based upon various assumptions, many of which are based, in turn, upon further assumptions, including examination of historical operating trends made by the management of the Partnership. Although the Partnership believes that these assumptions were reasonable when made, because assumptions are inherently subject to significant uncertainties and contingencies, which are difficult or impossible to predict and are beyond its control, the Partnership cannot give assurance that it will achieve or accomplish these expectations, beliefs or intentions. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements contained in the Partnerships filings with the SEC, including the Partnerships annual reports on Form 10-K and quarterly reports on Form 10-Q available on the Partnerships website at www.valeroenergypartners.com. These risks could cause the Partnerships actual results to differ materially from those contained in any forward-looking statement.

Use of Non-GAAP Financial InformationThis release includes the term EBITDA. We define EBITDA as net income before income tax expense, interest expense, and depreciation expense. EBITDA is a supplemental financial measure that is not defined under U.S. generally accepted accounting principles (GAAP). We believe that the presentation of EBITDA provides useful information to investors in assessing our financial condition and results of operations. The U.S. GAAP measure most directly comparable to EBITDA is net income. EBITDA should not be considered an alternative to net income in accordance with U.S. GAAP. EBITDA has important limitations as an analytical tool because it excludes some, but not all, items that affect net income. EBITDA should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Additionally, because EBITDA may be defined differently by other companies in our industry, our definition of EBITDA may not be comparable to similarly titled measures of other companies, thereby diminishing its utility.

VALERO ENERGY PARTNERS LPRECONCILIATION OF FORECASTED NET INCOME FOR THE FULL YEAR BEGINNING SEPTEMBER 1, 2016 UNDER U.S. GAAP TO EBITDA(Unaudited, in Thousands)

Meraux and Three Rivers Terminal Services Business

Forecasted net income

$

25,500

Add: Forecasted depreciation expense

2,600

Add: Forecasted interest expense

10,300

Add: Forecasted income tax expense

200

Forecasted EBITDA

$

38,600

(c) 2003-2016 Mehr News Agency Provided by SyndiGate Media Inc. (Syndigate.info)., source Middle East & North African Newspapers

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Financials ($)
Sales 2016 34 878 M
EBIT 2016 23 677 M
Net income 2016 25 252 M
Debt 2016 675 M
Yield 2016 3,58%
P/E ratio 2016 14,93
P/E ratio 2017 12,65
EV / Sales 2016 0,10x
EV / Sales 2017 0,09x
Capitalization 2 810 M
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Valero Energy Partners LP Technical Analysis Chart | VLP | US91914J1025 | 4-Traders
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Mean consensus OUTPERFORM
Number of Analysts 16
Average target price 55,0 $
Spread / Average Target 32%
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NameTitle
Joseph W. Gorder Chairman & Chief Executive Officer
Richard F. Lashway President, Chief Operating Officer & Director
Donna M. Titzman Chief Financial Officer, Treasurer, Director & SVP
Robert S. Beadle Lead Independent Director
Timothy J. Fretthold Independent Director
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