12-11-2014

Alon USA partners to acquire Krotz Springs refinery from Alon Energy

In a joint statement today, Alon USA Energy, Inc and Alon USA Partners, LP announced that Alon Partners has entered into an agreement to acquire Alon Energy's Krotz Springs refinery for total consideration of $437.5 million, which will be payable to Alon Energy in a combination of $100.0 million cash and $337.5 million in common units representing limited partner interests in Alon Partners. As part of the transaction, Alon Energy has agreed to reimburse the anticipated capital expenditures relating to the scheduled major maintenance turnaround of the Krotz Springs refinery in 2015. The transaction is expected to close on or about November 28, 2014.

Alon Energy and Alon Partners believe that the Krotz Springs refinery acquisition will provide Alon Partners diversification through crude slates, end products, customers and geographic locations, reduce Alon Partners' dependence on a single asset and simplify Alon Energy's corporate and capital structure.

Alon Partners and Alon Energy President and Chief Executive Officer, Paul Eisman said, "We are committed to identifying transactions that are accretive to Alon Partners' unitholders and this acquisition is a significant step in fulfilling that commitment. The Krotz Springs refinery drop down should provide a significant increase in Adjusted EBITDA for Alon Partners. Alon Energy's Krotz Springs refinery is well positioned to generate significant free cash flow, and this transaction unlocks the value of that business. This is a very positive step for the continued success of both Alon Partners and Alon Energy."

The terms of the transaction were approved by Alon Energy's Board of Directors and the Conflicts Committee of the Board of Directors of the general partner of Alon Partners, which is composed of independent directors. The Conflicts Committee was advised by Richards, Layton & Finger, its legal counsel, and Houlihan Lokey Capital, Inc., its financial advisor. Alon Energy was advised by Vinson & Elkins LLP, its legal counsel.