Inter Pipeline agrees to acquire NuStar Energy's European bulk liquid storage business

Inter Pipeline Ltd. has announced today that its European storage subsidiary, Inter Terminals Ltd., has entered into an agreement to acquire 100% of the issued share capital of NuStar Energy, L.P.'s European bulk liquid storage business for a cash consideration of US$270 million.

NuStar Europe consists of seven coastal terminals totaling 9.1 million barrels of storage. One terminal is located in Amsterdam, Netherlands with the remaining facilities located in the United Kingdom near London, Runcorn, Eastham, Grangemouth, Clydebank and Belfast.

The portfolio includes 321 tanks serving a diversified customer base, including integrated oil companies, chemical companies and major petroleum traders, and a cost-of-service and fee-based storage business primarily focused on inland distribution and blending of petroleum and petrochemical products.

The acquisition increases Inter Terminal's storage capacity by approximately 33% to 37 million barrels.

Funding for this acquisition will be provided by proceeds from a common share issuance and available capacity on its CAD1.5 billion (US$1.14 billion) committed revolving credit facility. No third party debt will be assumed under the terms of the transaction. 

Concurrent with the acquisition, Inter Pipeline has entered into an agreement with a syndicate of underwriters whereby they will purchase from Inter Pipeline, on a bought deal basis, 9.62 million common shares at a price of CAD20.80 (US$15.86) per common share for total gross proceeds of approximately CAD200 million (US$152.5 million). The offering is being led by TD Securities Inc. as the sole bookrunner, and co-led by BMO Capital Markets.

The offering of common shares is expected to close on or about 7 November 2018, subject to customary closing conditions and regulatory approvals. The transaction is expected to close in the fourth quarter of 2018 and is also subject to customary closing conditions.