DALLAS, Oct. 10, 2011 /PRNewswire/ -- HollyFrontier Corporation (NYSE: HFC) and Holly Energy Partners, L.P. (NYSE: HEP) today announced that their respective Boards of Directors have approved, subject to the execution of definitive agreements and other customary closing conditions, the acquisition by Holly Energy Partners, L.P. (Holly Energy) from HollyFrontier Corporation (HollyFrontier) of certain pipeline, tankage, loading rack and crude receiving assets located at HollyFrontier's El Dorado, Kansas and Cheyenne, Wyoming refineries for $340 million.
The purchase price of $340 million is expected to be paid in promissory notes with an aggregate original principal amount of $150 million and approximately 3.8 million Holly Energy common units valued at $190 million based upon the volume-weighted average price for the 10 trading days which ended October 7, 2011.
In connection with the closing of the proposed transaction, HollyFrontier and Holly Energy expect to enter into 15-year throughput agreements containing minimum annual revenue commitments from HollyFrontier. Holly Energy expects that this acquisition will result in an estimated $47 million of incremental annual revenue and that the transaction will be accretive to unit holders.
Both HollyFrontier and Holly Energy expect the proposed transaction will close in November, after the anticipated record date for third quarter 2011 distributions for Holly Energy common units.These assets being acquired consist of:
- the following assets located at HollyFrontier's El Dorado refinery:
- approximately 3.7 million barrels of hydrocarbon storage tanks;
- one refined products truck loading rack and one propane truck loading rack; and
- related refined product pipeline connections;
- the following assets located at HollyFrontier's Cheyenne refinery:
- approximately 1.8 million barrels of hydrocarbon storage tanks;
- one refined products truck loading rack, two propane loading spots, and three crude oil LACTs; and
- a crude receiving pipeline.