American Midstream Partners LP (NYSE: AMID) said Nov. 15 it had agreed to sell its refined products terminalling business to Sunoco LP (NYSE: SUN) for roughly $125 million cash.
American Midstream, based in Houston, owns or has an ownership interest in assets located in offshore and onshore basins including the Permian, Eagle Ford, East Texas, Bakken and Gulf Coast. The company said it expects the divestiture of its refined products terminals, located in Caddo Mills, Texas, and North Little Rock, Ark., will simplify its business profile while also creating capital flexibility.
The divestiture “represents continued progress towards American Midstream’s capital allocation strategy designed to reduce leverage and strengthen the partnership,” the company said in its press release.
The transaction also comes a few months after a previous deal to sell the refined products terminalling business was called off.
In February 2018, a joint venture between Delek Logistics Partners, LP (NYSE: DKL) and Green Plains Partners LP (NASDAQ: GPP) agreed to acquire American Midstream’s refined products terminalling business for about $138.5 million cash. However, by August the companies said the agreement had been terminated due to extensive federal regulatory approval delays as a result of the “highly strategic nature of these assets.”
Following the previous divestiture’s termination as well as a merger with Southcross Energy Partners LP (NYSE: SXE), which was also called off earlier this year, American Midstream received a buyout offer in September from ArcLight Capital Partners LLC.
In its buyout offer, ArcLight would acquire the remaining American Midstream common units it does not already own for $6.10 per unit. If approved, American Midstream said the transaction would be consummated through a merger of the company with a subsidiary of ArcLight.
American Midstream expects to close the sale of its refined products terminalling business in the fourth quarter of 2018. Closing of the sale is subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Act.
Barclays is the exclusive financial adviser and Sidley Austin LLP served as legal counsel to American Midstream for the transaction.
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