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Baker Botts Represents Valero Energy Corporation in $671 Million Drop-Down to Valero Energy Partners LP

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HOUSTON, March 5, 2015 - Valero Energy Corporation (NYSE: VLO) entered into a drop-down transaction with Valero Energy Partners LP (NYSE: VLP), pursuant to which VLP acquired membership interests in certain subsidiaries of VLO for total consideration of about $671 million, including approximately $100 million of common and general partner units of VLP.

The acquired entities operate crude oil, intermediates, and refined petroleum products terminals that support VLO’s Houston refinery and St. Charles Refinery. The assets consist of storage tanks with approximately 13.6 million barrels of storage capacity.

VLP financed the acquisition with $211 million of cash, $200 million of borrowings under its revolving credit facility, $160 million in borrowings under a five-year subordinated loan agreement with VLO, and the issuance of 1,908,100 common units, representing limited partner interests and 38,941 general partner units to VLO valued, collectively, at $100 million.

VLP also entered into 10-year terminaling agreements with subsidiaries of VLO. The businesses to be acquired are expected to contribute approximately $75 million of EBITDA in their first full year of operation.

Baker Botts represented VLO in the drop-down.

Baker Botts Lawyers/Office Involved: Gerald M. Spedale (Partner, Houston); Shalla Prichard (Partner, Houston); Steve Marcus (Partner, Dallas); Jeremy Moore (Senior Associate, Houston); Justine Robinson (Associate, Houston); Camille George (Associate, Houston)

 

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