Western Refining Acquires Ownership Stake in Northern Tier Energy

RIDGEFIELD, Conn. -- Western Refining Inc. inked an agreement to buy a stake in SuperAmerica parent company Northern Tier Energy LP. The deal closed today.

The transaction boosts Western Refining's retail holdings to an integrated network of 458 convenience stores.

Western Refining entered into the definitive agreement with Northern Tier's private equity sponsors, ACON Investments LLC and TPG. It acquired all of their interests in Northern Tier Energy, including those of the general partner for total consideration of $775 million, plus the distribution on the common units acquired with respect to the quarter ended Sept. 30.

As a result of this transaction, Western Refining now owns 100 percent of the general partner interest and 38.7 percent of Northern Tier. The balance of the limited partner units will remain publicly traded.

Northern Tier Energy President and CEO Hank Kuchta said during the company's third-quarter earnings call today that the deal is not expected to result in senior management changes.

"We are excited to welcome Western Refining as a new strategic partner and investor that is committed, as much as we are, to Northern Tier Energy's long-term success," said Kuchta. "We thank ACON and TPG for their support over the past three years, and we now look forward to working together with the Western Refining team to maximize value for all of our stakeholders."

Vinson & Elkins LLP served as legal counsel, and Barclays and J.P. Morgan Securities LLC served as co-financial advisors to ACON and TPG in the transaction.

"This investment further enhances our strategic goal of expanding our refining presence in areas with direct pipeline access to cost-advantaged crude oil resources," explained Jeff Stevens, president and CEO of Western Refining. "By adding these strategically aligned assets to our business portfolio, this transaction adds scale to our business and diversifies our operations by adding a new geographic region to our refining platform.

"Northern Tier Energy's St. Paul Park refinery is a very successful refinery with pipeline access to cost-advantaged crude oil and refined product regions that historically have generated strong product margins,” he continued. “The combined strength and scale of the two organizations will provide future growth opportunities for both companies over the long term."

Western Refining financed the transaction with a $550-million senior secured term loan B facility. The remainder, including fees and expenses, was funded with $245 million in cash.

Ridgefield, Conn.-based Northern Tier Energy is an independent downstream energy company with refining, retail and pipeline operations. It operates 163 SuperAmerica convenience stores; supports 74 franchised c-stores, primarily in Minnesota and Wisconsin; and owns a bakery and commissary under the SuperMom's brand.

Western Refining is an independent refining and marketing company headquartered in El Paso, Texas. Its retail segment includes service stations and convenience stores in Arizona, Colorado, New Mexico and Texas. The company also owns the general partner interest and approximately 65 percent of the limited partner interest of Western Refining Logistics Partners LP.