In a deal between two Texas energy giants, Dallas-based Sunoco LP has agreed to acquire San Antonio-based NuStar Energy LP in an all-equity transaction valued at roughly $7.3 billion, including assumed debt.
Sunoco said it has secured a $1.6 billion 364-day bridge term loan to refinance NuStar’s Series A, B, and C preferred units, subordinated notes, revolving credit facility, and receivables financing agreement.
The transaction is expected to close in the second quarter.
Sunoco relocated from Philadelphia to Dallas in 2016
Sunoco, which relocated from Philadelphia to Dallas in 2016, said the acquisition will increase stability by diversifying its business, add scale, and capture benefits of vertical integration by combining two stable businesses. It also strengthens its financial foundation, the company said.
The company said that more cash flow generation will be created for reinvestment and growth across an expanded set of opportunities.
Sunoco said the deal will create at least $150 million of run-rate synergies by the third year following close, along with roughly $50 million per year of additional cash flow from refinancing high-cost floating rate capital.
Prior to closing, NuStar will make a cash distribution of $0.212 per common unit to its common unitholders.
The acquisition follows news earlier this month that Irving-based 7-Eleven had acquired 204 stores from Sunoco in a deal that the Dallas Morning News said was valued at $950 million.
Sunoco said that Truist Securities served as its exclusive financial adviser in the NuStar acquisition. Truist and Bank of America provided committed financing. Weil, Gotshal & Manges LLP and Vinson & Elkins LLP acted as Sunoco’s legal advisers.
Barclays was the exclusive financial adviser to NuStar. Wachtell, Lipton, Rosen & Katz and Sidley Austin LLP acted as NuStar’s legal advisers.
Get on the list.
Dallas Innovates, every day.
Sign up to keep your eye on what’s new and next in Dallas-Fort Worth, every day.
R E A D N E X T
-
By having a solar farm built on a former city landfill, Farmers Branch plans to be the first Texas city to power all its facilities with 100% locally generated renewable electricity. Groundbreaking is slated for early next year, with operations starting as soon as Fall 2024.
-
Pearl manages roughly $1.9 billion of cumulative capital commitments across a series of energy-focused funds. Its newest fund, which was raised from "a diverse group of existing and new investors," represents the largest investment vehicle in Pearl’s history.
-
Dallas-based JetWind Power Corp.—whose founder and CEO is Dr. Tarek O. Souryal, a former Dallas Mavericks team physician—is testing its revolutionary Energy Capturing Pod system near the control tower at Dallas Love Field. Could aircraft carriers be next?
-
Industrial process heating is used to manufacture everything from the food we eat to the clothes we wear to the steel and paint on the cars we drive. Richardson-based Skyven is working to decarbonize that process with heat recovery systems that reduce CO2 emissions—and public-private funding is helping it do that. Real-world impact from its California Dairies projects demonstrate Skyven's model in action reducing emissions and costs.
-
Jacobs will support design and development of a micro modular power reactor from Seattle-based Ultra Safe Nuclear. Jacobs' Karen Wiemelt says the reactor—designed to harmonize with renewables—"has the potential to assist the world's energy transition and take nuclear power into a new era."
