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  • HF Sinclair Corp.

HF Sinclair, Holly Energy Partners announce definitive merger agreement



HF Sinclair Corp. and Holly Energy Partners LP announced Aug. 16 that they have entered into a definitive merger agreement for HF Sinclair to acquire all of the outstanding common units of HEP not owned by HF Sinclair or its affiliates in exchange for a combination of common stock, par value 1 cent per share, of HF Sinclair and cash.




HF Sinclair is an independent energy company that, through its subsidiaries, produces renewable diesel at two of its facilities in Wyoming and also at its facility in Artesia, New Mexico.




HEP provides petroleum-product and crude-oil transportation, terminalling, storage and throughput services to the petroleum industry, including subsidiaries of HF Sinclair. Through its subsidiaries and joint ventures,




HEP owns or operates petroleum-product and crude pipelines, tankage and terminals in Colorado, Idaho, Iowa, Kansas, Missouri, Nevada, New Mexico, Oklahoma, Texas, Utah, Washington and Wyoming, as well as refinery processing units in Kansas and Utah.




The agreement provides for consideration of both stock and cash in which each holder of common units would receive a combination of 0.315 shares of common stock and $4 in cash, without interest, for each publicly held common unit.




The proposed transaction consideration represents an approximate 2 percent premium to the closing price of HEP’s common units as of Aug. 15.




“We are pleased to announce this strategic transaction, which we believe simplifies our corporate structure, reduces costs and further supports the integration and optimization of our portfolio,” said Tim Go, HF Sinclair’s president and CEO. “We expect the transaction to be accretive to earnings per share and available free cash flow within the first 12 months, further supporting our capital allocation strategy of returning excess cash to shareholders.”




Upon closing of the proposed transaction, the partnership will be a wholly owned subsidiary of HF Sinclair and will no longer be a publicly traded partnership.




The proposed transaction is expected to close in the fourth quarter, subject to the approval of HF Sinclair stockholders and HEP unitholders and the satisfaction of certain customary closing conditions.




Barclays is acting as financial advisor to HF Sinclair, and Vinson & Elkins LLP and Richards, Layton & Finger PA are acting as HF Sinclair’s legal advisors.




Intrepid Partners LLC is acting as financial advisor to the conflicts committee of the board of the ultimate general partner of the partnership, and Gibson, Dunn & Crutcher LLP and Morris, Nichols, Arsht & Tunnell LLP are acting as the conflicts committee’s legal advisors.

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