SemGroup to Acquire Houston Fuel Oil Terminal Company for $2.1 Billion

SemGroup Corporation (NYSE:SEMG) announced it has entered into a definitive agreement with investment funds managed by Alinda Capital Partners to acquire Houston Fuel Oil Terminal Company (“HFOTCO”) for total consideration of $2.1 billion, including assumption of debt.

HFOTCO is a 16.8-million-barrel terminal strategically located on the U.S. Gulf Coast with pipeline connectivity to the local refining complex, deep water marine access and inbound pipeline, rail and truck receipt capabilities from all major producing basins. HFOTCO’s assets are located on 330 acres of the Houston Ship Channel, one of the most active trading centers for residual fuel oil and crude oil in the world.

Chris Beale, Managing Partner of Alinda Capital Partners, commented: “The HFOTCO management team has done an excellent job of growing and diversifying a world class terminal business. We believe that adding this asset to SemGroup’s portfolio is a great way to leverage customer relationships, strengthen both businesses and create additional shareholder value.”

“This is a transformational acquisition that adds tremendous stability to our business and provides a dynamic platform for growth,” said SemGroup President and CEO Carlin Conner. “Consistent with our strategy to diversify our portfolio and become more downstream logistics focused, HFOTCO brings a well-established base of high-quality, long-tenured customers to our business. At the same time, the terminal’s premier location on the Houston Ship Channel provides deep water access and is well positioned to capture increasing export volumes. With the addition of HFOTCO, SemGroup will be uniquely positioned to capture the future trends in exporting crude oil and refined products resulting from the U.S. shale boom.”

The acquisition is expected to close in the third quarter of 2017, subject to the receipt of certain governmental approvals and the satisfaction of other customary closing conditions.

SemGroup intends to maintain HFOTCO’s workforce and anticipates that all of the company’s approximately 125 employees will become members of the SemGroup team upon the transaction’s close.

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This transaction was completed on July 17, 2017.