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Delek US Holdings Inc. has agreed with several shareholders of Lion Oil Co. to acquire a 28.3-percent equity interest in the company.
Total cash consideration paid to the selling shareholders will be approximately $65.4 million. The terms of one of the transactions also call for Delek to issue 1,916,667 shares of Delek US Holdings Inc. common stock to TransMontaigne Inc, a wholly owned subsidiary of Morgan Stanley Capital Group Inc.
Lion Oil owns and operates a 75,000-barrel-per-day, high conversion crude oil refinery in El Dorado, Ark; three crude oil pipelines and two refined petroleum products terminals in Memphis and Nashville, Tenn. The two terminals supply products to some of Delek’s 188 convenience stores in the Memphis and Nashville markets.
"The assets of Lion Oil fit well with our operations, and we expect this investment to immediately enhance the earnings of Delek," said Uzi Yemin, president and CEO of Delek US. "This agreement establishes a relationship between Delek and Morgan Stanley Capital Group Inc. and a Morgan Stanley Capital Group Inc. affiliate. We look forward to future opportunities to work with them."
The transactions are subject to obtaining a minimum equity ownership position in Lion Oil, as well as other customary closing conditions and government approvals. The transactions are anticipated to close during the third quarter of this year.
Delek US Holdings is a diversified energy business focused on petroleum refining, marketing and supply of refined products, and retail marketing of fuel and general merchandise. It markets gasoline, diesel and other refined petroleum products and convenience merchandise through a network of company-operated retail fuel and convenience stores, operated under the MAPCO Express, MAPCO Mart, East Coast, Discount Food Mart, Fast Food and Fuel and Favorite Markets brand names.