TransMontaigne Partners LP announced November 8 that one of its wholly owned subsidiaries has entered into an agreement to acquire the Martinez Terminal and Richmond Terminal in California from an affiliate of Plains All American Pipeline LP for a total purchase price of $275 million.
The acquisition expands the partnership’s storage and terminaling footprint into the San Francisco CA Bay Area refining complex. The acquisition is expected to be financed through the proceeds of a common unit offering and cash available from other sources. The closing of the acquisition is expected to occur on or about January 1, 2018, subject to customary closing conditions.
“We believe that this transaction strengthens our position as one of the leading refined products terminaling and transportation service providers in the country,” said Fred Boutin, chief executive officer of TransMontaigne Partners. “The West Coast facilities are strategically located within the San Francisco Bay Area refining complex, one of the largest refining complexes in North America.
“These terminals and their fee-based cash flows are well-aligned with our existing business model, and are backed by agreements with customers that include many of the largest, most-recognizable refining, refining logistics and merchant trading companies in the world. This acquisition, combined with the organic growth we have executed this year, supports and extends our commitment to deliver stable and growing distributions over the long-term.”
The West Coast facilities include two waterborne refined product and crude oil terminals with a total of 64 storage tanks with approximately 5.4 million barrels of storage capacity. The facilities have extensive connectivity to domestic and international refined product and crude oil markets through significant marine, pipeline, truck, and rail capabilities. The facilities are supported by multi-year, fee-based agreements with contract terms of up to five years.
The purchase price reflects a less than 10 times multiple of the Partnership’s estimate of the 2018 EBITDA attributable to the West Coast facilities based on current customer contracts and historical and anticipated activity levels, revenues and operating costs. The partnership cautions that it cannot provide any assurance that the West Coast facilities will achieve this anticipated level of EBITDA.