Holly Energy Partners has signed an agreement to acquire US-based, Woods Cross Refinery unit owner HollyFrontier subsidiary for approximately $275m.
The units were constructed as part of the Woods Cross expansion.
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The transaction is expected to be immediately accretive to unitholders and will contribute towards the achievement of Holly Energy Partners’ distribution growth target of 8%.
Under the agreement, Holly Energy will acquire the newly constructed crude, fluid catalytic cracking and polymerisation units at HollyFrontier's Woods Cross refinery.
HollyFrontier and Holly Energy further expect to sign tolling agreements for 15 years for each respective unit containing minimum quarterly throughput commitments from HollyFrontier, in connection with the closing of the proposed deal.
Holly Energy plans to fund the acquisition by way of a private placement with certain clients of Tortoise Capital Advisors for about $100m of common equity.
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By GlobalDataThe remaining purchase price will be financed by borrowings under the company’s existing revolving credit agreement.
The acquisition is subject to the execution of definitive agreements and other customary closing conditions and is expected to close on or around 1 October this year.
HollyFrontier operates a 135,000 barrels per stream day (bpsd) refinery in El Dorado, Kansas, and a 125,000bpsd refinery in Tulsa, Oklahoma, through its subsidiaries.
Other assets include a 100,000bpsd refinery located in Artesia, New Mexico, a 52,000bpsd refinery located in Cheyenne, Wyoming and a 45,000bpsd refinery in Woods Cross, Utah.
