| Buckeye Partners To Acquire 80% Interest In BORCO From First Reserve: Buckeye Partners is Expanding Its Core Assets - Deal Analysis From GlobalData |
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Buckeye Partners To Acquire 80% Interest In BORCO From First Reserve: Buckeye Partners is Expanding Its Core Assets - Deal Analysis From GlobalData
Summary
Buckeye Partners, L.P. (Buckeye Partners), a company engaged in the transportation, terminals and storage of refined petroleum products, signed a definitive agreement to acquire 80% interest in Bahamas Oil Refining Company International (BORCO), an operator of oil storage, fuel blending and marine facilities, from First Reserve Corporation (First Reserve), a private equity firm with focused investment in energy industry, for a consideration of $1,360m. BORCO is a 21.6 million barrel (MMbbl) storage terminal for crude oil, fuel oil and multiple petroleum products in Freeport, Bahamas, just 80 miles east of the coast of Florida.
Buckeye Partners expects to finance the acquisition through a combination of equity and debt as follows: Buckeye will issue 4.38 million units of a new Class B shares of Buckeye at a price of $57.04 per unit to First Reserve, resulting in proceeds of $250m and 2.48m of Buckeye LP units at a price of $60.4 per unit, resulting in proceeds of $150m. Under the terms, the Class B units will be substantially similar in all respects to Buckeye’s existing LP units, except that Buckeye may elect to pay distributions in respect of the Class B units through the issuance of additional Class B units rather than cash. The Class B units will convert into LP units on a one-for-one basis on the earlier of (i) the date on which at least four million barrels of incremental storage capacity are placed in-service at BORCO and (ii) the third anniversary of the closing date of the BORCO acquisition. The institutional investors’ committed to subscribe for 5.79 million Buckeye LP units at a price of $60.4 per unit and 1.31 million Class B units at a price of $57.04 per unit, resulting in gross proceeds of $425m. In addition, the Buckeye Partners plans to raise cash through the issuance of term debt prior to closing the acquisition rather than make use of the bridge facility. Buckeye Partners has also obtained a commitment from Barclays Bank PLC, SunTrust Robinson Humphrey, Inc., and SunTrust Bank, Inc., for a senior unsecured bridge facility of up to $775m to provide the remainder of the proceeds to finance the acquisition.
Barclays Capital Inc. is acting as sole financial advisor to Buckeye Partners with respect to the transaction. The transaction is subject to approval by certain Bahamian governmental authorities and is otherwise subject to customary closing conditions and is expected to complete the transaction during the first quarter of 2011
Scope
- Rationale behind Buckeye Partners acquiring BORCO from First Reserve is that it intends to expand its business
- Strategic Benefits for the companies involved
- Geography covered -Bahamas, Deal Financials and Valuations
- Information on First Reserve, Buckeye partners
Reasons to buy
- Develop a sound understanding of the major M&A's, Partnerships, And Joint Ventures taking place in Asian Oil & Gas industry
- Identify the most lucrative segments to leverage on the growth oppurtunities available in the Asian oil & gas market
- Get a detailed analysis of a deal to enable you to take better decisionsCompanies Mentioned
1 Table of Contents 1
1.1 List of Tables 1
2 Buckeye Partners To Acquire 80% Interest In BORCO From First Reserve 1
2.1 Deal Overview 1
2.2 Deal in Brief 1
2.3 First Reserve and Royal Vopak owns 80% and 20% Respectively in BORCO 2
2.4 BORCO is one of the Largest Storage Terminals in the Caribbean 2
2.5 Buckeye Partners plans to acquire 80% Stake of First Reserve in BORCO 3
2.6 The Acquisition will be financed through Equity and Debt 3
2.7 Buckeye Partners is Expanding its Business Inorganically 4
2.8 Deal Financials and Valuations 4
2.8.1 Companies Involved 4
2.8.2 Deal Financials 4
2.8.3 Deal Rationale 4
2.8.4 Advisor Information 4
2.8.5 Debt Provider Information 4
2.8.6 Detailed Target Information 5
2.8.7 Storage Capacity Information 5
2.8.8 Transaction Implied Values 5
2.8.9 Detailed Acquirer Information 5
2.8.10 Detailed Vendor Information 5
3 Appendix 6
3.1 Methodology 6
3.1.1 Coverage 6
3.1.2 Secondary Research 6
3.1.3 Primary Research 6
3.1.4 Expert Panel Validation 6
3.2 Contact Us 7
3.3 Disclaimer 71.1 List of Tables
Table 1: Buckeye Partners, Asset Transaction Details, 2010 4
Table 2: Companies Involved 4
Table 3: Financials of the Deal 4
Table 4: Advisor Information 4
Table 5: Debt Provider Information 4
Table 6: Target Information 5
Table 7: Target’s Storage Capacity Information 5
Table 8: Company Valuation Multiples 5
Table 9: Acquirer Information 5
Table 10: Vendor Information 5
| Title |
Date |
Price |
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Jan 2012 |
$250.00 |
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|
Jan 2012 |
$250.00 |
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Jul 2009 |
$2500.00 |
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Sep 2009 |
$2500.00 |
|
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Jul 2009 |
$3000.00 |
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Aug 2009 |
$2500.00 |
|
|
Dec 2009 |
$2500.00 |
|
|
Oct 2009 |
$2000.00 |
|
|
Jul 2009 |
$2500.00 |
|
|
Aug 2009 |
$3000.00 |
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