NuStar Energy L.P. has entered into a definitive agreement to acquire Navigator Energy Services, LLC for $1.475 billion, subject to purchase price adjustments. Navigator owns and operates crude oil transportation, pipeline gathering and storage assets located in the Midland Basin of West Texas, consisting of:
- approximately 500 miles of crude oil mainline transportation pipelines with approximately 74,000 barrels per day, ship-or-pay volume commitments and deliverability of approximately 412,000 barrels per day through multiple outbound interconnects;
- a pipeline gathering system with more than 200 connected producer tank batteries capable of more than 400,000 barrels per day of pumping capacity covering over 500,000 dedicated acres; and
- approximately 1 million barrels of crude oil storage capacity with 440,000 barrels leased to third parties.
The acquisition is expected to close in mid- to late-May 2017, subject to customary closing conditions, including the receipt of regulatory approvals. Because the acquisition is subject to customary closing conditions, the Partnership can give no assurance that the transaction will be consummated on the terms described or at all.
“We are excited about starting 2017 with a strategic acquisition, and the addition of Navigator’s Permian assets marks NuStar’s entry into one of the most prolific basins in the United States,” said NuStar President and CEO Bradley C. Barron. “We expect that the purchase price, when coupled with modest future growth CAPEX to build out the system, will result in a high single digit multiple as volumes ramp over time.”
“We could not be more excited for all of Navigator’s stakeholders in finding a future owner in NuStar that shares our commitment to exceptional customer and employee relations. We will be working with NuStar to provide a seamless transition for customers and employees alike,” said Chief Executive Officer, John O’Shea and Co-Founder & Chief Commercial Officer, Matt Vining.
“The Navigator team has built a truly unique company predicated on a customer-first philosophy underpinned by a group of employees focused on flawless execution. We are confident NuStar will have tremendous success integrating Navigator and transitioning it into the next phase of growth,” added Mark Saxe, Managing Director of First Reserve Energy Infrastructure Fund.
