Delek US Holdings Inc. (NYSE: DK) (“Delek US”) announced that it has
entered into a definitive stock purchase agreement with Alon Israel Oil
Company Ltd. (“Alon Israel”) to acquire approximately 33.7 million
shares, or approximately 48 percent of the outstanding shares, of Alon
USA Energy, Inc. (NYSE: ALJ) (“Alon USA”) common stock owned by Alon
Israel.
Uzi Yemin, Chairman, President and Chief Executive Officer of Delek US
stated, “We are excited about this opportunity to invest in Alon USA as
it broadens our asset diversity while offering future growth
opportunities. We would like to thank Alon Israel's management team for
their support and efforts in this transaction, and we look forward to
working with Alon USA’s Board of Directors and management team to create
further value together in the future.”
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 agreement allows Delek US to
acquire up to 49.99 percent of the outstanding shares of Alon USA at its
discretion, with additional ownership above this threshold subject to
approval of Alon USA’s board of directors. The stockholder agreement
will expire on the first anniversary of the closing of this transaction,
and Delek US will then have no further restrictions on ownership in Alon
USA.
Transaction Financing
The consideration to be paid by Delek US to acquire the Alon USA common
stock will consist of the issuance of 6.0 million shares of restricted
Delek US common stock to Alon Israel, an unsecured $145.0 million
promissory note payable to Alon Israel maturing in January 2021 and
$200.0 million of cash that will be funded with a combination of cash on
hand and borrowings on new or existing credit facilities. An additional
200,000 shares of Delek US common stock may be issued to Alon Israel
under certain circumstances as outlined in the agreement. The
approximate value of the transaction consideration is $572.4 million
based upon a closing price of $37.90 per share of Delek US common stock
on April 14, 2015. The transaction is expected to close in the second
half of May subject to customary governmental and other third party
approvals.
Bank of America Merrill Lynch and Barclays acted as financial advisors
to Delek US in connection with this transaction.
About Delek US Holdings, Inc.
Delek US Holdings, Inc. 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, Arkansas with a combined nameplate production capacity of
155,000 barrels per day. Delek US Holdings, Inc. and its affiliates own
approximately 62 percent (including the 2 percent general partner
interest) of Delek Logistics Partners, LP. Delek Logistics Partners, LP
(NYSE: DKL) is a growth-oriented master limited partnership focused on
owning and operating midstream energy infrastructure assets. The retail
segment markets fuel and merchandise through a network of approximately
365 company-operated convenience store locations operated under the
MAPCO Express®, MAPCO Mart®, East Coast®, Fast Food and Fuel™, Favorite
Markets®, Delta Express® and Discount Food Mart™ brand names.
Safe Harbor Provisions Regarding Forward-Looking Statements
This press release contains forward-looking statements that are based
upon current expectations and involve a number of risks and
uncertainties. Statements concerning current estimates, expectations and
projections about future results, performance, prospects and
opportunities and other statements, concerns, or matters that are not
historical facts are “forward-looking statements,” as that term is
defined under the federal securities laws.
Investors are cautioned that the following important factors, among
others, may affect these forward-looking statements. These factors
include but are not limited to: management’s ability to execute its
strategy of growth through acquisitions and the transactional risks
associated with acquisitions; changes in the scope, costs, and/or timing
of capital and maintenance projects; risks and uncertainties with
respect to the quantities and costs of crude oil we are able to obtain
and the price of the refined petroleum products we ultimately sell;
operating hazards inherent in transporting, storing and processing crude
oil and intermediate and finished petroleum products; gains and losses
from derivative instruments; our competitive position and the effects of
competition; the projected growth of the industries in which we operate;
general economic and business conditions, particularly levels of
spending relating to travel and tourism or conditions affecting the
southeastern United States; and other risks contained in our filings
with the United States Securities and Exchange Commission.
Forward-looking statements should not be read as a guarantee of future
performance or results and will not be accurate indications of the times
at, or by which such performance or results will be achieved.
Forward-looking information is based on information available at the
time and/or management’s good faith belief with respect to future
events, and is subject to risks and uncertainties that could cause
actual performance or results to differ materially from those expressed
in the statements. Delek US undertakes no obligation to update or revise
any such forward-looking statements.
Copyright Business Wire 2015