Transaction Deconsolidates Asphalt Operations, Reduces Earnings
Volatility and Allows for Debt Reduction/ Investment in High-Return
Pipeline and Terminal Assets
SAN ANTONIO--(BUSINESS WIRE)--Sep. 28, 2012--
NuStar Energy L.P. (NYSE: NS) today announced that it has closed on the
sale of a 50% voting interest in its asphalt operations to an affiliate
of Lindsay Goldberg LLC, a private investment firm. In conjunction with
the sale, a joint venture was created that owns and operates NuStar’s
asphalt refining assets, including asphalt refineries located in
Paulsboro, New Jersey and Savannah, Georgia, and related working
capital. NuStar and Lindsay Goldberg each have a 50% voting interest.
At closing, Lindsay Goldberg paid NuStar $175 million for its interest
in the joint venture and the joint venture purchased the inventory of
the asphalt operations from NuStar based on current market prices. The
joint venture funded the inventory purchase with borrowings under a
third-party asset-based revolving credit facility and an unsecured
revolving credit facility provided by NuStar.
Initial cash proceeds received by NuStar as a result of this
transaction, including the $175 million paid by Lindsay Goldberg, were
approximately $270 million. This transaction should eventually allow
NuStar to reduce its debt balances by $400 to $500 million, depending on
the joint venture’s working capital requirements. NuStar intends to use
the proceeds from this transaction for general corporate purposes
including the repayment of outstanding borrowings under its revolving
credit facility, working capital purposes and to finance potential
future acquisitions.
The Board of Managers of the joint venture is chaired by Bill Greehey,
currently Chairman of the Board for NuStar Energy L.P. and NuStar GP
Holdings, LLC. Michael Pesch, previously Vice President of Regional
Operations for NuStar Energy L.P., is the Chief Executive Officer of the
joint venture.
“We are pleased that we were able to close this transaction, as
previously announced, prior to the end of the third quarter,” said Curt
Anastasio, president and CEO of NuStar. “This transaction monetizes a
portion of NuStar’s asphalt operations and allows us to still maintain a
50% voting interest in a business that has the potential to generate
significant cash flows as the U.S. economy improves.”
Anastasio went on to say, “The transaction also allows NuStar to reduce
its earnings volatility, and reduce debt, and it provides additional
opportunities to invest in stable, high-return, pipeline and terminal
assets, while simultaneously giving the Asphalt JV the flexibility it
needs to prosper in a more robust margin environment.”
About NuStar Energy
NuStar Energy L.P. is a publicly traded limited partnership based in San
Antonio, with 8,433 miles of pipeline; 82 terminal and storage
facilities that store and distribute crude oil, refined products and
specialty liquids; a fuels refinery with a throughput capacity of 14,500
barrels per day and a 50% voting interest in two asphalt refineries with
a combined throughput capacity of 104,000 barrels per day. The
partnership’s combined system has approximately 94 million barrels of
storage capacity. One of the largest independent liquids terminal
operators in the nation, NuStar has operations in the United States,
Canada, Mexico, the Netherlands, including St. Eustatius in the
Caribbean, the United Kingdom and Turkey. For more information, visit
NuStar Energy L.P.'s Web site at www.nustarenergy.com.
About Lindsay Goldberg LLC
Lindsay Goldberg is a private investment firm with approximately $10
billion of capital under management that focuses on partnering with
entrepreneurial management teams and closely-held and family-owned
businesses. The firm typically invests in companies in North America and
Western Europe in the manufacturing, energy, financial and business
services industries. Lindsay Goldberg has an investment structure that
permits ownership for up to 20 years.
Cautionary Statement Regarding Forward-Looking Statements
This press release includes forward-looking statements regarding
future events. All forward-looking statements are based on the
partnership and company's beliefs as well as assumptions made by and
information currently available to the partnership and company. These
statements reflect the partnership and company's current views with
respect to future events and are subject to various risks, uncertainties
and assumptions. These risks, uncertainties and assumptions are
discussed in NuStar Energy L.P. and NuStar GP Holdings, LLC’s 2011
annual reports on Form 10-K and subsequent filings with the Securities
and Exchange Commission.
Source: NuStar Energy L.P.
NuStar Energy, L.P., San Antonio
Investors, Chris Russell, Vice
President
Investor Relations: 210-918-3507
or
Media, Mary
Rose Brown, Senior Vice President,
Corporate Communications:
210-918-2314
Web site: http://www.nustarenergy.com