American Midstream Partners (AMID) has entered into an agreement to sell its refined products terminalling business (Refined Products Terminals) to Sunoco for $125m in cash, subject to working capital adjustments.
The transaction is expected to conclude in the fourth quarter of 2018.
According to AMID, disposal of the Refined Products Terminals, located in Caddo Mills, Texas, and North Little Rock, Arkansas, marks the company’s progress towards capital allocation strategy to reduce leverage and strengthen the partnership.
The refined products terminalling business has a combined 21 tanks, approximately 1.3 million barrels of storage capacity and approximately 77,500 barrels per day of total throughput capacity.
The divestiture of the Refined Products Terminals also simplifies AMID’s business profile while creating capital flexibility.
Closure of the sale of the Refined Products Terminals is subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Act.
Barclays acted as financial advisor and Sidley Austin as legal counsel to American Midstream for the Refined Products transaction.
For Sunoco, the acquisition builds on its strategy of adding fee-based refined product terminals into the overall portfolio.
Previously, AMID announced the closure of sale of the marine products terminalling business (Marine Products Terminals) to institutional investors advised by JP Morgan Asset Management for $210m in cash, as part of the partnership’s non-core asset divestiture program.
The Marine Products Terminals include the Harvey and Westwego terminals located in the Port of New Orleans and the Brunswick terminal in the Port of Brunswick in Georgia.
The proceeds will initially be used to reduce indebtedness under the partnership’s revolving credit facility, while enhancing liquidity.
Bank of America Merrill Lynch acted as exclusive financial advisor and Sidley Austin served as legal counsel to AMID for this transaction.
AMID and DKGP Energy Terminals, a joint venture between Delek Logistics Partners and Green Plains Partners, terminated an agreement for the sale of the partnership’s refined products terminalling business (Refined Products Terminals).
The agreement was terminated due to extensive federal regulatory approval delays as a result of the highly strategic nature of these assets.