I'm sorry I missed this three days ago, but ...
Remember last year when Marathon Petroleum said it would transfer its marine operations to its pipeline limited partnership, then canceled it later in the year? Well, it's gone through, as was announced Monday. It takes effect at the end of this month.
I saw a Marathon boat yesterday. It still had the Marathon logo on the stacks and the Marathon name on the side. If the transaction is final two weeks from today, the change will likely occur then.
The entire news release is below.
FINDLAY, Ohio, March 14, 2016 - Marathon Petroleum Corp. (NYSE: MPC) and
MPLX LP (NYSE: MPLX) have executed definitive agreements for the
contribution of MPC's inland marine business to MPLX. In exchange, MPLX
will issue equity to MPC valued at $600 million. MPLX expects 98 percent
of the equity to be issued in the form of common units and the
remainder in general partner units, at an approximate price of $26.09
The total transaction
consideration represents an implied multiple of approximately five times
the inland marine business' projected earnings before interest, taxes,
depreciation and amortization (EBITDA) for the next 12 months. MPC has
agreed to waive first-quarter 2016 distributions, including incentive
distribution rights and general partner distributions, with respect to
the common units issued in the transaction. Pending customary closing
conditions, the transaction is expected to close as of March 31 and will
be immediately accretive to unitholders.
inland marine business, comprised of 18 tow boats and 205 barges,
transports light products, heavy oils, crude oil, renewable fuels,
chemicals and feedstocks in the Midwest and U.S. Gulf Coast regions, and
accounts for nearly 60 percent of the total volumes MPC ships by inland
"The addition of
these high-quality, well-maintained marine assets to the partnership
under a fee-for-capacity contract with MPC adds approximately $120
million of annual EBITDA, providing a highly predictable income and
cash-flow stream that further diversifies the earnings mix for MPLX,"
said MPLX Chairman and Chief Executive Officer Gary R. Heminger. "The
acquisition price reflects MPC's ongoing and strong support of the
Heminger noted that
issuing new equity to MPC in consideration for the assets eliminates the
need for MPLX to access the public equity markets to fund the
The terms of the
acquisition were approved by the Conflicts Committee of the board of
directors of MPLX's general partner. The committee is comprised entirely
of independent directors, and is being advised principally by Evercore
Partners as to financial matters, Akin Gump Strauss Hauer & Feld as
to legal matters and K&L Gates as to admiralty and maritime law