- USD Partners LP (NYSE:USDP) (Partnership) has agreed to acquire entities owning the Hardisty South terminal assets from USD Group LLC (Sponsor), exchange the Sponsor's economic general partner interest in the Partnership for a non-economic GP Interest, and eliminate the Sponsor's incentive distribution rights in the Partnership for total consideration of $75 million in cash and ~5.75 million common units.
- The Partnership expects the transaction to increase its asset base's size, scale, and growth capacity and provide double-digit accretion to Distributable Cash Flow per Unit in 2023.
- The deal optimizes operational and commercial synergies of Hardisty Terminal and consolidates benefits of blue-chip Diluent Recovery Unit asset growth at the MLP for the benefit of all Partnership unitholders.
- The Partnership expects to fund the cash portion with borrowings under its senior secured credit facility's $275 million.
- As of December 31, 2021, the Partnership had ~$3.7 million of unrestricted cash and equivalents.
- The Partnership expects the transaction to close during 2Q22. USDG will hold a non-economic GP interest in the Partnership and ~17.3 million common units post-closing.
- Price Action: USDP shares are trading higher by 1.24% at $5.72 on the last check Monday.
