Delek US Announces Agreement to Sell Retail Related Assets for $535 Million
- Agreement includes an 18-month fuel supply agreement
- Transaction expected to close by year end
Delek US Holdings, Inc. (NYSE: DK)(“Delek”) today announced that it has entered into a definitive agreement with Compañía de
Petróleos de Chile COPEC S.A. (SNSE:COPEC) (“COPEC”), pursuant to which Delek will sell MAPCO Express, Inc., and certain related
affiliated companies, (together “MAPCO”) to a U.S. subsidiary of COPEC for total cash consideration of $535 million (the
“Transaction”) 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 (NYSE: DKL), 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.
Uzi Yemin, Chairman, President and Chief Executive Officer of Delek, said, “We have unlocked the value of our retail assets
through this transaction with COPEC. 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.
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 also 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 motor fuel and convenience merchandise through a network of approximately 348 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. Delek US Holdings, Inc. also owns approximately 48 percent of the outstanding common stock of
Alon USA Energy, Inc. (NYSE: ALJ).
About Copec S. A.
COPEC is a wholly owned subsidiary of one of the largest public companies in Chile, “Empresas Copec S.A.”, which is a holding
company operating through subsidiaries in fuel and lubricants distribution & convenience stores, forestry, fishing, and other
industries.
Empresas Copec S.A. was founded in 1934 and is headquartered in Santiago, Chile and is among Chile’s largest publicly traded
companies. Empresas Copec S.A. operates mainly in two large areas where it has sustainable competitive advantages: natural
resources and energy. Its main industry sectors include fuel distribution & convenience stores, forestry, fishing and other
industries. The company, through its subsidiary Celulosa Arauco, has commercial presence in over 80 countries and has production
facilities in Chile, Argentina, Brazil, Canada, the United States and Uruguay, which provide potential for future growth.
AntarChile S.A. (SNSE: ANTARCHILE) has a controlling stake of approximately 60% in Empresas Copec S.A.
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: 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; gains and losses from derivative instruments; changes
in the scope, costs, and/or timing of capital and maintenance projects; management’s ability to execute its strategy of growth
through acquisitions and the transactional risks associated with acquisitions; acquired assets may suffer a diminishment in fair
value as a result of which we may need to record a write-down or impairment in carrying value of the asset on the balance sheet and
a resultant loss recognized in the statement of operations; the effect on our financial results by the financial results of Alon
USA Energy, Inc., in which we hold a significant equity investment; operating hazards inherent in transporting, storing and
processing crude oil and intermediate and finished petroleum products; 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
and COPEC undertake no obligation to update or revise any such forward-looking statements.
Delek US Holdings, Inc.
U.S. Investor/Media Relations:
Keith Johnson, 615-435-1366
Vice President of Investor Relations
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