Sprague Resources LP (Sprague) has announced that its wholly owned subsidiary, Sprague Operating Resources LLC, has completed the purchase of Capital Terminal Company’s refined product terminal asset in East Providence, Rhode Island, for US$23 million in cash, plus payments for other customary items. This terminal had been leased exclusively by Sprague since April 2014 and has a combined storage capacity of just over 1 million bbls.
A total of US$11 million in expansion capital will also be invested as part of this acquisition and subsequent optimisation with Sprague’s Providence terminal. This follows the recently announced purchase of Global Partners LP’s natural gas marketing and electricity brokerage assets for approximately US$17.3 million in cash and the acquisition of L. E. Belcher, Inc.’s refined product terminal assets in Springfield, MA for US$20 million in cash.
“I’m excited to announce the closing of our third transaction this month, which highlights our commitment to growth and the successful execution of that strategy. These acquisitions continue our natural gas marketing and electricity brokerage roll up strategy, while expanding our portfolio of refined product terminals and material handling assets. The value of these acquisitions is enhanced by leveraging our unique supply and logistics capabilities, as we further expand our footprint and increase customer penetration within our core business segments” said David Glendon, Sprague’s President and CEO.
“These additions are expected to be accretive to distributable cash flow and generate an estimated US$10 to US$13 million of adjusted EBITDA annually. Sprague’s financial performance has allowed us to grow distributions while maintaining healthy distribution coverage, and simultaneously de-levering our balance sheet. Our existing credit facility provides sufficient liquidity to finance these acquisitions, and we expect our permanent leverage ratio to remain within our targeted 2.5 to 3.5 times.”
Read the article online at: https://www.tanksterminals.com/storage-tanks/22022017/sprague-completes-terminal-purchase/