Delek US Holdings’s $105 Million Agreement for Dropdown Logistic Assets


The Conflicts Committee engaged Baird to act as its financial advisor and Gibson Dunn & Crutcher L.L.P. to act as its legal counsel, while Delek US engaged Baker Botts L.L.P. as its legal counsel.

Delek US Holdings, Inc. (NYSE: DK) and Delek Logistics Partners, LP (NYSE: DKL) announced an agreement for the dropdown of the Big Spring gathering system to Delek Logistics for total consideration of $100 million in cash and 5.0 million common units representing limited partnership interest in Delek Logistics. The transaction is effective March 31, 2020, and is expected to be immediately accretive to Delek Logistics’ distributable cash flow per unit.

These assets and services are projected to generate incremental annual earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately $30 to $32 million. Delek Logistics will finance the cash component of this dropdown through a combination of cash on hand and borrowings on the revolving credit facility.

The transaction and related agreements were approved by the Conflicts Committee of Delek Logistics’ general partner, which is comprised solely of independent directors.

The Baker Botts team included A.J. Ericksen (Picture), Ieuan List, Shumaila Dhuka, Scott Looper, Austin Jennings, Casey Polivka, Rachael Lichman, Chad Davis, Michael Bresson, Jared Meier and Evan Skeenhttp.

Involved fees earner: Michael Bresson – Baker Botts; Chad Davis – Baker Botts; Shumaila Dhuka – Baker Botts; A.J. Ericksen – Baker Botts; Austin Jennings – Baker Botts; Rachael Lichman – Baker Botts; Ieuan List – Baker Botts; Scott Looper – Baker Botts; Jared Meier – Baker Botts; Casey Polivka – Baker Botts; Evan Skeen – Baker Botts;

Law Firms: Baker Botts;

Clients: Delek US Holdings, Inc.;

Author: Ambrogio Visconti