This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

HollyFrontier Corporation And Holly Energy Partners Announce Agreement In Principle For Acquisition Of Interest In UNEV Pipeline

Stocks in this article: HEP HFC





DALLAS, June 28, 2012 /PRNewswire/ -- HollyFrontier Corporation (NYSE:HFC) ("HollyFrontier") and Holly Energy Partners, L.P. (NYSE:HEP) ("Holly Energy") today announced that their respective Boards of Directors have approved  the acquisition of HollyFrontier's 75% interest in UNEV Pipeline, LLC ("UNEV") by Holly Energy for $315 million, subject to certain post-closing purchase price adjustments.  UNEV is the owner of an approximate 400 mile, 12-inch refined products pipeline currently running from Woods Cross, Utah to Las Vegas, Nevada, related products terminals near Cedar City, Utah and Las Vegas, Nevada and other related assets.  The purchase price of $315 million is expected to be paid with $260 million in cash and approximately 1.0 million Holly Energy common units valued at $55 million, issued to HollyFrontier.

In connection with the closing of the proposed transaction, HollyFrontier, the owner of Holly Energy's general partner, has agreed to forego its right to $1.25 million per quarter of incentive distributions from Holly Energy that the general partner would otherwise be entitled to receive over the 12 consecutive quarters following the closing of the transaction and an additional 4 quarters in certain circumstances.  HollyFrontier will also receive a profits interest that will be paid beginning the fifth year after the closing based on UNEV's EBITDA for the fourth year following the closing, by which it would be entitled in certain circumstances to receive 50% of Holly Energy's portion of UNEV's EBITDA over $30 million, until the earlier of reaching a cap or 20 years following the closing.

The closing of the proposed transaction is subject to the execution of definitive agreements, expiration (or early termination) of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, closing of an amendment to Holly Energy's credit facility to, among other things, increase the size of the facility, the delivery of final and satisfactory fairness opinions to the applicable committee of each Board, and other customary closing conditions.  Both HollyFrontier and Holly Energy expect the proposed transaction will close in July 2012.

Mike Jennings, CEO and President of HollyFrontier, and Matt Clifton, CEO and President of Holly Energy, said "This transaction allows Holly Energy to continue its record of steady growth in tariff-based revenues by purchasing an interest in this strategic common carrier refined products pipeline and is expected to be immediately accretive to Holly Energy's distributable cash flow.  The transaction also represents a continuation of HollyFrontier's strategy of capitalizing its logistics assets in the most efficient manner and redeploying capital in its core refining and marketing operations."

Holly Energy will host an investor conference call to provide more detail and to answer questions regarding the proposed transaction after the closing of the transaction.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs