Delek US Holdings announces closing of the acquisition of Alon USA
BRENTWOOD, Tenn. — Delek US Holdings, Inc. announced the closing of the acquisition of the remaining outstanding shares of Alon USA Energy, Inc. common stock in an all-stock transaction. The close of this transaction became effective on July 1. Under terms of the agreement, the owners of the remaining outstanding shares in Alon will receive a fixed exchange ratio of 0.5040 Delek US shares for each share of Alon, with cash paid in lieu of fractional shares. Prior to this transaction, Delek US owned approximately 33.7 MM shares, or 47%, of the common stock of Alon. Following closing, Delek US will have approximately 82.0 MM shares outstanding.
The combined company will primarily be led by Delek US’ management team, with Uzi Yemin serving as Chairman, President and Chief Executive Officer, Fred Green as Executive Vice President and Chief Operating Officer and Kevin Kremke as Executive Vice President and Chief Financial Officer.
The Special Committee of Alon’s board of directors nominated David Wiessman as a new director to be added to the Delek US board and Ron Haddock as a new director to be added to the board of Delek Logistics GP, LLC, which is Delek Logistics Partners, LP’s general partner. As outlined in the merger agreement, within 30 days after the closing of the transaction, Delek US will increase the size of its board of directors by one seat and appoint Mr. Wiessman to such newly created seat. In addition, the board of directors of Delek Logistics’ general partner will increase the size of its board of directors by one seat and appoint Mr. Haddock to such newly created seat.
The combined company have a broad platform consisting of refining, logistics, retail and wholesale marketing, as well as renewables and asphalt operations:
- The refining system will have approximately 300,000 bpd of crude throughput capacity consisting of four locations and an integrated retail platform that includes approximately 300 locations serving central and west Texas and New Mexico.
- Logistics operations will include Delek Logistics, which can benefit from future drop downs and organic projects to support a larger refining system.
- The marketing operation will supply over 350 wholesale locations, have unbranded wholesale sales of approximately 145,000 bpd of light products in 13 states, and have utilization of 450,000 bbl per month of space on the Colonial Pipeline System.
- The company will have an integrated asphalt business consisting of operations primarily in Texas, Arkansas, Oklahoma, California and Washington approaching 1.0 MMt of sales on an annual basis. This operation is supported through a combination of production and supply/exchange volume with 14 asphalt terminals in the operation.
- The biodiesel/renewable diesel assets, with a total capacity of approximately 61.0 MMgal per year, will include biodiesel plants in Cleburne, Texas and Crossett, Arkansas, and a renewable diesel and jet fuel plant in California.
Delek US will have a large presence in the Permian Basin. Its refining system will initially have access to approximately 207,000 bpd of Permian sourced crude out of an approximately 300,000-bpd crude throughput system, which equates to approximately 69% of the crude slate. This will result in the combined company being one of the largest buyers of Permian sourced crude among the independent refiners, creating opportunities to benefit from economies of scale in both refining and logistics. As a result of this combination, there will be a larger marketing presence with retail locations and wholesale marketing operations in the region that are integrated with the Big Spring, Texas refinery. From a logistics standpoint, the system will have access to crude oil pipelines, trucking and gathering operations in the area, in addition to Delek Logistics’ RIO joint venture crude oil pipeline in west Texas. This larger system also enhances the opportunities for Delek Logistics to expand its current participation in the highly attractive Permian Basin by supporting a larger operation
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