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BRENTWOOD, Tenn.-- Delek US Holdings Inc. said it has signed a definitive agreement to acquire additional common shares of Lion Oil Co., whose two refined petroleum products terminals supply products to some of Delek's 188 convenience stores in the Memphis and Nashville, Tenn., markets.
The additional shares equal an interest of approximately 6.24 percent in Lion Oil, and will bring Delek's total equity interest in the company to approximately 35 percent. Total cash to be paid for the additional interest is approximately $23 million.
The transaction is subject to customary closing conditions and governmental approvals, and is anticipated to close during the third quarter of this year, Delek stated.
Delek also said in a news release that it has completed its acquisition of a 28.34 percent interest in Lion Oil, which was previously reported on by CSNews Online.
Total cash paid to the selling shareholders by Delek was about $65.4 million in the aggregate. As part of the transaction, Delek also issued 1,916,667 shares of its common stock, or 3.7 percent of its issued and outstanding shares, to TransMontaigne Inc., a wholly-owned subsidiary of Morgan Stanley Capital Group Inc.
"We are pleased to finalize our initial investment in Lion Oil, and look forward to completing the additional investment soon," said Delek president and CEO Uzi Yemin. "We believe that this investment enhances our portfolio and fits with our future plans."
Lion Oil is a privately held company. In addition to its two refined petroleum terminals, the company also owns and operates a 75,000-barrel-per-day, high-conversion crude oil refinery in El Dorado, Ark., along with three crude oil pipelines.
Delek US Holdings is a diversified energy business focused on petroleum refining, marketing and supply of refined products, as well as retail marketing of fuel and general merchandise. The refining segment operates a high conversion, independent refinery, with a design crude distillation capacity of 60,000 barrels per day, in Tyler, Texas. The marketing and supply segment markets refined products through its terminals in Abilene, Texas and San Angelo, Texas, as well as other third party terminals.
The retail segment 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.