Martin Midstream Partners L.P. has completed the
acquisition of marine services assets from Tesoro Marine Services, L.L.C., a
subsidiary of Tesoro Petroleum Corporation, a refiner and marketer of
petroleum products. MMLP purchased assets associated with Tesoro's shore
based marine activities for $25 million plus approximately $1.8 million for
Tesoro's lube oil inventories. The assets acquired include 13 marine
terminals located along the Gulf Coast from Venice, Louisiana to Corpus
Christi, Texas, nine tank barges and
four pushboats as well as Tesoro's
lubricant distribution and marketing business. Acquisition financing was
provided through an expansion of MMLP's existing credit facility with Royal
Bank of Canada from $60 million to $80 million. After giving effect to the
consummation of this transaction, MMLP's borrowings under its credit facility
include $25 million of previously existing term debt and $40 million of
revolving debt, including $27 million incurred in connection with the Tesoro
transaction and $3 million incurred in connection with the previously
announced acquisition of a terminal and three vessels.
In a parallel transaction,
Midstream Fuel Service LLC purchased Tesoro's
fuel oil distribution business for $2 million plus approximately $4.8 million
for Tesoro's diesel fuel inventories. Midstream Fuel Service is a subsidiary
of privately held Martin Resource Management Corporation ("MRMC"), the owner
of MMLP's general partner. MRMC acquired these assets from Tesoro because
fuel oil distribution generates non-qualifying income under Internal Revenue
Service regulations applicable to publicly traded limited partnerships such as
MMLP. However, pursuant to contractual arrangements between MRMC and Martin
Midstream Partners, MMLP will provide marine transportation and storage
services to Midstream Fuel Service. Financing for the assets acquired by MRMC
was provided through an expansion of MRMC's existing credit facility.
Ruben Martin, Chief Executive Officer of Martin Midstream G
P LLC, MMLP's
general partner, stated, "We are pleased to have completed our first major
acquisition since our initial public offering last year. We believe that the
acquisition of Tesoro's marine services business complements our current
marine transportation, terminalling and distribution operations along the Gulf
Coast."