Valero L.P. Completes Acquisition of Kaneb Services LLC and Kaneb Pipe Line Partners, L.P.; New Partnership is One of the Nation
01 Julio 2005 - 9:40AM
Business Wire
Valero L.P. (NYSE:VLI) today announced that it has successfully
completed its acquisition of Kaneb Services LLC (NYSE:KSL) and
Kaneb Pipe Line Partners, L.P. (NYSE:KPP). With an enterprise value
of more than $4 billion, the combined partnership will be one of
the largest terminal and petroleum liquids pipeline operators in
the United States. As part of the nearly $2.7 billion transaction,
Valero L.P. also acquired all of Kaneb Services' equity securities
for $43.31 cash per share and converted Kaneb Partners' units to
Valero L.P. units at an exchange ratio of 1.0231 Valero L.P. unit
for each Kaneb Partners' unit. Kaneb Services and Kaneb Partners
are now wholly owned subsidiaries of Valero L.P. The general
partner of the combined partnership will continue to be owned by
affiliates of Valero Energy Corp. (NYSE: VLO). The assets of the
combined partnership, which will retain the name Valero L.P.,
include approximately 9,150 miles of pipeline comprised of
approximately 6,350 miles of refined product pipelines, 800 miles
of crude oil pipelines and a 2,000-mile anhydrous ammonia pipeline.
The partnership also owns 94 terminal facilities and four crude oil
storage tank facilities located in 25 U.S. states, Canada, Mexico,
the Netherlands Antilles, the Netherlands, Australia, New Zealand
and the United Kingdom. The system has approximately 77.6 million
barrels of storage capacity. "We're excited to complete this
acquisition, which brings together two of the best pipeline and
terminal operators in the country to form one of the premier
mid-stream logistics partnerships in the world," said Curt
Anastasio, president and chief executive officer of Valero L.P.
"Plus, as a result of the acquisition, Valero L.P. is in a great
strategic position with stronger, more diversified operations,
increased earnings stability, and a stable foundation for future
growth. "As we've said before, this is a great transaction for our
investors because it's accretive to cash flow and positions us well
for future distribution increases. In fact, with this acquisition
complete, we will now recommend to our board of directors an
increase in the annual distribution rate from $3.20 per unit to
$3.42 per unit," he said. On June 15, Valero L.P. announced that it
had signed a consent decree with the Federal Trade Commission in
which the FTC required the partnership to divest certain Kaneb
assets in the Philadelphia, Colorado and the San Francisco Bay
areas. Interest in these assets has been high and Valero L.P.
officials said they are confident that these assets can be divested
quickly at a favorable price. About Valero L.P. Valero L.P. is a
master limited partnership based in San Antonio, with 9,150 miles
of pipeline, 94 terminal facilities and four crude oil storage
facilities. One of the largest terminal and independent petroleum
liquids pipeline operators in the nation, the partnership has
terminal facilities in 25 U.S. states, Canada, Mexico, the
Netherlands Antilles, the Netherlands, Australia, New Zealand and
the United Kingdom. The partnership's combined system has
approximately 77.6 million barrels of storage capacity, and
includes crude oil and refined product pipelines, refined product
terminals, petroleum and specialty liquids storage and terminaling
business, as well as crude oil storage tank facilities. For more
information, visit Valero L.P.'s web site at www.valerolp.com.
Cautionary Statement Regarding Forward-Looking Statements This
press release includes forward-looking statements within the
meaning of the Securities Litigation Reform Act of 1995 regarding
future events and the future financial performance of Valero L.P.
All forward-looking statements are based on the partnership's
beliefs as well as assumptions made by and information currently
available to the partnership. These statements reflect the
partnership's current views with respect to future events and are
subject to various risks, uncertainties and assumptions. These
risks, uncertainties and assumptions are discussed in Valero L.P.'s
2004 annual report on Form 10-K and subsequent filings with the
Securities and Exchange Commission.
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