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HONOLULU -- Par Petroleum Corp. inked a deal to acquire Tesoro Hawaii LLC from Tesoro Corp. The definitive agreement includes refining, retail and distribution assets in the Aloha State, including 31 retail outlets that will remain under the Tesoro brand after the deal closes.
"We are pleased to have reached this positive outcome for the company," said Greg Goff, president and CEO of San Antonio-based Tesoro Corp. "While the Hawaii operations do not align with our strategic focus, we believe they offer a great opportunity for Par Petroleum."
Under the terms of the agreement, Houston-based Par Petroleum, through a wholly-owned subsidiary, will purchase all outstanding membership interests of Tesoro Hawaii for $75 million in cash, plus net working capital and the market value of inventory at closing. Also included in the purchase price is an earn-out arrangement of up to $40 million payable over three years contingent on certain performance metrics.
The transaction has been unanimously approved by the board of directors of Par Petroleum and is subject to certain closing conditions. The acquisition is expected to be completed in the third quarter.
"This is a great fit for Par Petroleum and we are pleased to make a long-term investment in Hawaii's economy," said Will Monteleone, chairman of the board and CEO of Par Petroleum. "We have found in Tesoro Hawaii a great company with outstanding assets and a superb management team and employee base. We aim to serve customers through operational excellence and enhance value for the communities we serve with a focus on safety, environmental stewardship and employee commitment."
The new refining subsidiary will operate as a separate, wholly-owned subsidiary of Par Petroleum with William Haywood serving as president. Haywood has more than 30 years of experience in the energy field and was most recently senior vice president of refining for Tesoro Corp. The new subsidiary will be headquartered in Houston.
Also in conjunction with the Tesoro Hawaii transaction, Par Petroleum named Peter Coxon as its chief operating officer. Coxon, who has nearly 30 years of experience in the transportation and energy industries, currently serves as president of Texadian Energy, a wholly-owned subsidiary of Par Petroleum.