Par Pacific Holdings in $358 Million Acquisition of U.S. Oil & Refining Co.

Bracewell LLP advised Par Pacific Holdings, Inc. (NYSE: PARR) on the deal

Par Pacific Holdings, Inc. (NYSE: PARR) has signed a definitive agreement to acquire U.S. Oil & Refining Co. and certain affiliated entities, a privately-held downstream business, for $358 million plus net working capital. The acquisition includes a 42,000 bpd refinery, a marine terminal, a unit train-capable rail loading terminal, and 2.9 MMbbls of refined product and crude oil storage. The refinery and associated logistics system are strategically located in Tacoma, WA and currently serve the Pacific Northwest market.

U.S. Oil’s refinery is located on 139 acres of fee-owned land near Tacoma, WA. The 42,000 bpd refinery has the flexibility to optimize its crude slate based on market conditions; currently, discounted Bakken and Cold Lake crude represent over 95% of its current crude slate. U.S. Oil’s diverse logistics assets include 2.9 MMbbls of storage capacity, a proprietary 14-mile jet fuel pipeline, a marine terminal with 15 acres of waterfront property, a unit train rail facility with 107 unloading spots and a truck rack with six truck lanes and 10 loading arms. These assets provide connectivity to Bakken, Canadian and Alaskan crude and Pacific, West Coast, Pacific Northwest and Rockies product markets.

Under the terms of the agreement, Par Pacific will purchase 100% of the equity interests of U.S. Oil for total consideration of $358 million plus net working capital. For the twelve months ended September 30, 2018, U.S. Oil generated Adjusted EBITDA of approximately $86 million. Par Pacific estimates that annual operational and cost synergies of $7.5 million to $12.5 million will result from the transaction.

The transaction is expected to be funded with proceeds from a $225 million secured term loan and $150 million of equity financing. Committed debt financing is being provided by Goldman Sachs, subject to customary terms and closing conditions. Committed equity financing is being provided by U.S. Oil’s financial sponsor but the Company may alternatively seek equity financing via the capital markets.

Bracewell advised with a team including Ryan S. Holcomb (Picture), Michele J. Alexander, Bruce R. Jocz, Elena V. Rubinov, Robert E. Sheeder, Timothy A. Wilkins, David J. Harty, Ryan Davis, Patrick K. Johnson, Christie L. Latimer, Daniel J. Pope and Shannon M. Rice.

Involved fees earner: Michele Alexander – Bracewell; Ryan Davis – Bracewell; David Harty – Bracewell; Ryan Holcomb – Bracewell; Bruce Jocz – Bracewell; Patrick Johnson – Bracewell; Christie Latimer – Bracewell; Daniel Pope – Bracewell; Shannon Rice – Bracewell; Elena Rubinov – Bracewell; Robert E. Sheeder – Bracewell; Timothy Wilkins – Bracewell;

Law Firms: Bracewell;

Clients: Par Pacific Holdings Inc;

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Author: Ambrogio Visconti