
A wholly-owned subsidiary of USD Partners LP announced today that it has entered into a Membership Interest Purchase Agreement (the âPurchase Agreementâ) with South 49 Holdings Ltd., a member of the Midstream Energy Partners group of companies (collectively, the âBuyerâ). Upon the terms and subject to the conditions set forth in the Purchase Agreement, the Partnership agreed to sell its Casper rail terminal, by means of a sale of all of the equity interests of the subsidiary which owns the terminal, to the Buyer for a cash purchase price of approximately $33.0 million (the âTransactionâ), subject to customary adjustments. The Transaction is expected to close prior to the end of the second quarter of 2023. The Partnership intends to use a majority of the proceeds from the Transaction, net of expenses, to repay borrowings outstanding under the Partnershipâs revolving credit facility and to retain the remaining proceeds to support general Partnership purposes.
âAs we continue to transition our business to lower carbon solutions, including our DRUbitâą by Railâą network, we are reviewing all assets and their strategic fit in our growth plans,â said Dan Borgen, the Partnershipâs Chief Executive Officer. âAs we mentioned on our Q4 2022 earnings call, we remain committed to converting all of our dilbit capacity to our long-term sustainable DRUbitâą program at the Partnershipâs Hardisty Terminal, which is supported by investment grade counterparties and ten year, take-or-pay contracts.â
Piper Sandler & Co. served as the exclusive financial advisor to USD Partners LP in connection with the Transaction.
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The Purchase Agreement contains customary representations and warranties, covenants, termination rights, and indemnification provisions, subject to specified limitations. In addition, the completion of the Transaction is subject to certain customary conditions.
Additional details regarding the Purchase Agreement are included in the Partnershipâs Current Report on Form 8-K filed on March 23, 2023.
Source: USD Partners LP