NuStar Energy L.P. announced today that it has closed on the sale of its European terminals and related assets to Inter Terminals Ltd., which is Inter Pipeline Ltd.’s European storage subsidiary, for $270 million, plus normal closing adjustments. The operations include six liquids storage terminals in the United Kingdom and one facility in Amsterdam.
"This was a very important strategic decision for NuStar but also a difficult one given the quality of the assets and workforce," said NuStar President and CEO Brad Barron. "But as we have said, the assets were not synergistic with our other operations, and the sale helps us achieve the final component of our comprehensive plan launched earlier this year to position NuStar for long-term success by significantly lowering our debt metrics in order to deliver strong, sustainable distribution coverage for the future."
Barron outlined other transformative actions of the plan that included simplifying NuStar's corporate structure and eliminating the incentive distribution rights to lower the company's cost of capital and allow it to continue to build on the strength of its asset base with less dependence on the equity capital markets. NuStar will use proceeds from the transaction to pay down debt and fund the growth of its core operations.
"We are very pleased with the progress we have made in implementing our plan and the results we have seen," Barron said. "All of this was necessary due to a fundamental shift in the Master Limited Partnership (MLP) sector this past year that required the transformative actions we have taken to ensure the long-term financial strength of the company.
"And we are pleased that these operations and employees are now part of another strong company with more operational and geographical synergies, which should create more growth opportunities for the operations and more advancement opportunities for the employees," Barron added.
Wells Fargo Securities, LLC served as NuStar’s exclusive financial advisor on this transaction.
