Blueknight’s Sale of Three Asphalt Terminals to Ergon


Bracewell LLP represents Evercore, financial advisor to the Conflicts Committee of the Board of Directors of the general partner of Blueknight Energy Partners, L.P. (NASDAQ: BKEP), regarding the sale of three asphalt terminals located in Lubbock and Saginaw, Texas and Memphis, Tennessee to Ergon Asphalt & Emulsions, Inc. for a purchase price of $90.0 million in cash.

Blueknight Energy Partners, L.P. has entered into an Asset Purchase Agreement with Ergon Asphalt & Emulsions, Inc. to sell three asphalt terminals located in Lubbock and Saginaw, Texas and Memphis, Tennessee to Ergon A&E for a purchase price of $90.0 million in cash. Net proceeds from the Asset Sale will be used to reduce outstanding indebtedness under BKEP’s credit facility. The transaction is subject to normal closing conditions and regulatory approval and is expected to close upon the expiration or earlier termination of the HSR waiting period.

Ergon A&E is an affiliate of Ergon, Inc. (“Ergon”), which indirectly owns (i) 100% of Blueknight Energy Partners G.P., L.L.C., the general partner (the “General Partner”) of the Partnership and (ii) 27.5% of the limited partnership interests in the Partnership. Accordingly, the Conflicts Committee of the Board of Directors of the General Partner reviewed and evaluated the Purchase Agreement to determine whether to grant special approval of the Purchase Agreement and the Asset Sale. The Conflicts Committee retained independent legal and financial advisors, Potter Anderson & Corroon LLP and Evercore, respectively, to assist with the evaluation of the terms of the Purchase Agreement and Asset Sale. The Conflicts Committee unanimously approved the Purchase Agreement and the Asset Sale.

In addition, BKEP amended its credit facility to, among other things, (i) permit the Asset Sale, (ii) permit BKEP to make up to a $55.0 million investment in the previously announced Cimarron Express joint venture, (iii) reduce commitments under the credit facility from $450.0 million to $400.0 million, (iv) limit distributions by the Partnership to $10.7 million per quarter until December 31, 2019, and (v) provide financial covenant relief, all subject to the terms and conditions of the credit facility amendment.

Bracewell advised with a team including Will Anderson (Picture) and Andrew W. Monk.

Involved fees earner: William Anderson – Bracewell; Andrew Monk – Bracewell;

Law Firms: Bracewell;

Clients: Evercore Partners;

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Author: Ambrogio Visconti