Par Pacific Holdings of Houston announced Tuesday that it is acquiring Tacoma-based U.S. Oil and Refining Co. and affiliated entities for $358 million.
The acquisition includes purchase of U.S. Oil’s 139-acre complex on the Tideflats. It including a 42,000-barrels-per-day refinery, a marine terminal, a rail loading terminal and 2.9 million barrels of refined product and crude oil storage.
“This transformative acquisition connects our existing assets in Hawaii, Pacific Northwest and the Rockies to create an integrated downstream network with significantly enhanced scale and diversification,” William Pate, president and CEO of Par Pacific Holdings, said in a statement announcing the deal.
“We have been executing an ambitious strategic growth plan focused on attractive downstream markets for over three years,” Pate said, “and the acquisition of U.S. Oil further demonstrates the progress we have made. We believe that this transaction provides a strong platform for earnings and cash flow growth.”
The announcement was made on Par Pacific’s website.
The company owns and manages energy interests, related retailing and infrastructure businesses, with “refining and logistics assets” in Hawaii and Wyoming and a retail distribution network in Washington, Idaho and Hawaii, according to its website.
The company also owns equity investment in Laramie Energy LLC, which focuses on producing natural gas in Colorado.
Pate, in an investor’s conference call Tuesday, also noted the Tacoma site had “a proprietary jet fuel pipeline connecting operations to McChord Air Force Base.”
“This transaction fits squarely within our growth strategy by adding scale in the Pacific Northwest, one of the markets we are targeting, and diversification to our overall business,” Pate said.
A big advantage in the Tacoma site, company officials said in its Tuesday call, is its “crude slate flexibility and proximity to Bakken and Cold lake Western Canadian heavy crude.”
Pate noted that “Dips for Canadian and Northern Rockies crude were at record levels, and the Tacoma refinery is a big beneficiary of this pricing environment. As a result, we expect a significant increase in profitability from Tacoma next year.”
The deal is set to close in January. In Par Pacific’s presentation online, it says the deal “further balances mainland and Pacific crude exposure by tripling mainland refinery capacity” for the company.
The deal will be financed through a $225 million secured term loan, $150 million common equity and assumption “of the seller’s existing working capital facility.”
Par Pacific’s presentation is available at https://b2icontent.irpass.com/2193/175703.pdf.
The investors’ call transcript is available at https://bit.ly/2FHE76N.