Delek will unlock the value of its retail assets by selling MAPCO Express for a total of $535 million in cash.
Delek US Holdings Inc. has entered into a definitive agreement to sell MAPCO Express Inc., along with certain related affiliated companies, to a U.S. subsidiary of Compañía de Petróleos de Chile COPEC S.A. (COPEC).
The transaction will be completed for a total cash consideration of $535 million plus MAPCO’s cash on hand at closing. This transaction is subject to customary closing conditions and is expected to close by year end.
Following a strategic review by Delek of options to unlock the value of its retail assets, which included a potential drop down to Delek Logistics Partners LP, Delek determined that the sale to COPEC was an efficient and prudent way to unlock value for Delek’s shareholders. Debt associated with the retail assets, which was approximately $160.0 million at June 30, 2016, will be repaid at closing. As part of this transaction, Delek will continue to supply fuel to certain MAPCO retail locations under an 18-month supply agreement.
“We have unlocked the value of our retail assets through this transaction with COPEC,” Uzi Yemin, chairman, president and CEO of Delek, said. “I want to thank the MAPCO team for their efforts in developing the MAPCO brand. The compelling valuation we were able to achieve is a direct result of their hard work. This transaction creates an exciting opportunity for MAPCO and its employees as it becomes a key component of COPEC’s U.S. growth strategy. Delek also gains a partner in retail fuel sales and will continue to supply locations through its wholesale business and space on the Colonial Pipeline system. As a result, our consolidated RINs position should not be significantly changed by this transaction. At June 30, 2016, we had approximately $377.0 million of cash, and the completion of this transaction should give us additional financial flexibility. This flexibility can be used to support Delek Logistics Partners as it explores growth opportunities, as well as continuing to evaluate strategic opportunities to create long term value for our shareholders.”
Delek’s exclusive financial advisor was RBC Capital Markets LLC. COPEC’s financial advisor was Raymond James & Associates Inc. and legal advisor was Simpson Thacher & Bartlett LLP.
