Magellan Midstream Partners, L.P. announced today an agreement to sell three marine terminals to Buckeye Partners, L.P. for $250 million. The terminals are located in New Haven, Connecticut, Wilmington, Delaware and Marrero, Louisiana.
"Magellan remains focused on capital discipline and managing our business for the long term," said Michael Mears, chief executive officer. "Optimization of our asset portfolio, including divestiture of facilities outside our strategic footprint, is an important element to maximize unitholder value and our strong financial position."
Mears continued, "I would also like to personally and on behalf of the organization express our gratitude for the contributions from all employees supporting these facilities through the years and during this time of transition."
The sale is expected to close by late first quarter or early second quarter 2020, subject to regulatory approvals.
The partnership intends to provide 2020 financial guidance as part of its fourth-quarter 2019 earnings release on Jan. 30 but does not expect the terminals sale to have a material impact on its future financial results.
Jefferies served as financial advisor and GableGotwals served as legal counsel to Magellan in connection with the transaction.
Unit repurchase program: The partnership also announced that its board of directors has authorized the repurchase of up to $750 million of common units through 2022. Magellan intends to purchase its common units from time-to-time through a variety of methods, including open market purchases and negotiated transactions, all in compliance with the rules of the Securities and Exchange Commission and other applicable legal requirements.
"Magellan remains committed to our long-standing disciplined approach to financing our business and pursuing attractive projects," confirmed Mears. "In addition, we intend to opportunistically utilize additional tools, including the unit repurchase program announced today as well as potential special distributions, to accomplish our core goal of maximizing value for our investors."
The timing, price and actual number of common units repurchased will depend on a number of factors including the partnership's expected expansion capital spending needs, alternative investment opportunities, excess cash available, legal and regulatory requirements, market conditions and the trading price of its common units. The repurchase program does not obligate the partnership to acquire any particular amount of common units, and the repurchase program may be suspended or discontinued at any time at the partnership's discretion.
