UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 15, 2014
WESTERN REFINING LOGISTICS, LP
(Exact name of registrant as specified in its charter)
| | | | |
Delaware (State or other jurisdiction of incorporation or organization) | | 001-36114 (Commission File Number) | | 46-3205923 (IRS Employer Identification No.) |
123 West Mills Avenue, Suite 200
El Paso, Texas 79901
(Address of principal executive office) (Zip Code)
(915) 534-1400
(Registrants’ telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Introductory Note
On October 15, 2014, Western Refining Logistics, LP (the “Partnership”) completed its previously announced acquisition from Western Refining, Inc. (“Western”) of the outstanding limited liability company interests of Western Refining Wholesale, LLC (“WRW”), which owns primarily all of Western’s southwest wholesale assets (the “Business”), pursuant to a Contribution, Conveyance and Assumption Agreement, dated September 25, 2014, as amended (the “Contribution Agreement”), by and among the Partnership, Western, Western Refining Southwest, Inc., a wholly-owned indirect subsidiary of Western (“WRSW”), and Western Refining Logistics GP, LLC, the general partner of the Partnership (the “General Partner”). Pursuant to the Contribution Agreement, the Partnership acquired all of the outstanding limited liability company interests of WRW in exchange for total consideration of $360 million, comprised of approximately $320 million in cash and the issuance of approximately 1.16 million common units representing limited partner interests in the Partnership (collectively with the Commercial Agreements (as defined below), the “Transaction”). The cash payment was primarily financed using bank financing under the Partnership’s existing credit facility.
Item 1.01. Entry into a Material Definitive Agreement.
Product Supply Agreement
In connection with the closing of the Contribution Agreement, on October 15, 2014, Western Refining Company, L.P. (“WRC”), WRSW (together with WRC, collectively, the “Sellers”), and, solely for the purposes of section 3.7 thereof, Western entered into a Product Supply Agreement with WRW (the “Product Supply Agreement”) whereby the Sellers have agreed to supply and WRW has agreed to purchase approximately 79,000 barrels per day of refined products for sale to WRW’s wholesale customers. The Product Supply Agreement includes product pricing based upon OPIS or Platts indices on the day of delivery. The Product Supply Agreement also contains, subject to certain exceptions, a covenant restricting Western’s ability to compete in certain wholesale activities in the southwest United States (a “restricted business”). If Western acquires assets relating to the restricted business or an entity that engages in a restricted business, in each case, the value of which exceeds certain thresholds, the Partnership will have the right to acquire, on an exclusive basis, the restricted business so acquired at fair market value within a certain period of time. The Product Supply Agreement has an initial ten-year term.
The foregoing description of the Product Supply Agreement is not complete and is qualified in its entirety by reference to the text of the Product Supply Agreement, which is attached to this Current Report on Form 8-K as Exhibit 10.1 and incorporated in this Item 1.01 by reference.
Fuel Distribution and Supply Agreement
In connection with the closing of the Contribution Agreement, on October 15, 2014, WRW entered into a Fuel Distribution and Supply Agreement with WRSW (the “Fuel Distribution Agreement”) whereby WRSW has agreed to purchase a minimum of 645,000 barrels per month of branded and unbranded motor fuels for its retail and cardlock businesses at a price equal to WRW’s product cost at each terminal, plus taxes, fees and actual transportation costs, plus a margin of $0.03 per gallon. Under the Fuel Distribution Agreement, WRSW is obligated to offer WRW the first opportunity to satisfy all of its incremental branded and unbranded motor fuel requirements. The Fuel Distribution Agreement has an initial ten-year term.
The foregoing description of the Fuel Distribution Agreement is not complete and is qualified in its entirety by reference to the text of the Fuel Distribution Agreement, which is attached to this Current Report on Form 8-K as Exhibit 10.2 and incorporated in this Item 1.01 by reference.
Crude Oil Trucking Transportation Services Agreement
In connection with the closing of the Contribution Agreement, on October 15, 2014, the Sellers entered into a Crude Oil Trucking Transportation Services Agreement with WRW (the “Crude Trucking Agreement” and together with the Product Supply Agreement and the Fuel Distribution Agreement, the “Commercial Agreements”) whereby the Sellers have agreed to utilize WRW’s crude oil trucks to haul a minimum of 1.525 million barrels of crude oil each month. The Sellers have agreed to pay a per barrel fee based on the distance between the applicable pick-up and delivery points, plus, monthly fuel adjustments and customary applicable surcharges. The Crude Trucking Agreement has an initial ten-year term.
The foregoing description of the Crude Trucking Agreement is not complete and is qualified in its entirety by reference to the text of the Crude Trucking Agreement, which is attached to this Current Report on Form 8-K as Exhibit 10.3 and incorporated in this Item 1.01 by reference.
The terms of the Transaction were unanimously approved on behalf of the Partnership by the Conflicts Committee (the “Conflicts Committee”) of the Board of Directors of the General Partner. The Conflicts Committee, composed of independent members of the Board of Directors of the General Partner, retained independent legal and financial advisors to assist it in evaluating and negotiating the Transaction. In approving the Transaction, the Conflicts Committee based its decisions in part on an opinion from its independent financial advisor that the consideration to be paid by the Partnership was fair to the Partnership and its subsidiaries and the unaffiliated common unitholders of the Partnership from a financial point of view.
A copy of the Contribution Agreement was filed as Exhibit 2.1 to the Current Report on Form 8-K filed by the Partnership with the Securities and Exchange Commission on October 1, 2014 and is incorporated herein by reference.
Relationships
Each of the Partnership, the General Partner, WRSW and WRW is a direct or indirect subsidiary or affiliate of Western. As a result, certain individuals, including officers and directors of Western, the Partnership and the General Partner, serve as officers and/or directors of more than one of such other entities. Western owns through its wholly-owned subsidiaries 8,158,592 common units (including the approximately 1.16 million common units issued to Western in connection with the closing of the Transaction) representing limited partner interests of the Partnership and 22,811,000 of the subordinated units representing limited partner interests in the Partnership. In addition, the General Partner owns a non-economic general partner interest in the Partnership.
Item 2.01 Completion of Acquisition or Disposition of Assets.
To the extent required, the information set forth under “Introductory Note” and Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference. A copy of the Contribution Agreement was filed as Exhibit 2.1 to the Current Report on Form 8-K filed by the Partnership with the Securities and Exchange Commission on October 1, 2014 and is incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth under “Introductory Note” of this Current Report on Form 8-K with respect to the issuance and sale by the Partnership of the common units representing limited partner interests in the Partnership to Western is incorporated herein by reference. This private placement of Partnership common units issued pursuant to the Contribution Agreement was made in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2).
Item 7.01 Regulation FD Disclosure.
On October 15, 2014, the Partnership and Western issued a joint press release announcing the consummation of the Transaction, including entry into the Commercial Agreements. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
The information contained in this Item 7.01 of this Current Report on Form 8-K (including the exhibit) is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information contained in this Item 7.01 of this Current Report on Form 8-K shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.
Item 9.01. Financial Statements and Exhibits.
| (a) | Financial Statements of Business Acquired. |
Attached hereto as Exhibit 99.2 to this Current Report on Form 8-K and incorporated herein by reference are: (i) the audited combined financial statements of the Business as of and for the years ended December 31, 2012 and 2013, (ii) the unaudited combined balance sheet of the Business as of June 30, 2014; (iii) the unaudited combined statements of operations and cash flows of the Business for the six months ended June 30, 2014 and June 30, 2013 and (iv) the unaudited combined statement of segment equity of the Business from December 31, 2011 to June 30, 2014.
| (b) | Pro Forma Financial Information. |
The unaudited pro forma condensed consolidated balance sheet of the Partnership as of June 30, 2014 and the unaudited pro forma condensed consolidated statement of operations for the Partnership for the six months ended June 30, 2014 and the years ended December 31, 2011, 2012, 2013 are included as Exhibit 99.3 to this Current Report on Form 8-K and are incorporated herein by reference.
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Exhibit
Number | | Description |
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| 10.1† | | Product Supply Agreement, dated October 15, 2014, by and among Western Refining Southwest, Inc., Western Refining Company, L.P. and Western Refining Wholesale, LLC. |
| |
| 10.2† | | Fuel Distribution and Supply Agreement, dated October 15, 2014, by and between Western Refining Wholesale, LLC and Western Refining Southwest, Inc. |
| |
| 10.3† | | Crude Oil Trucking Transportation Services Agreement, dated October 15, 2014, by and among Western Refining Wholesale, LLC, Western Refining Company, L.P. and Western Refining Southwest, Inc. |
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| 23.1 | | Consent of Deloitte & Touche LLP. |
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| 99.1 | | Joint Press Release of Western Refining Logistics, LP and Western Refining, Inc. issued October 15, 2014. |
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| 99.2 | | Audited combined financial statements of the Business as of and for the years ended December 31, 2012 and 2013; unaudited combined balance sheet of the Business as of June 30, 2014 and unaudited combined statements of operations and cash flows of the Business for the six months ended June 30, 2014 and June 30, 2013 and unaudited combined statement of segment equity of the Business from December 31, 2011 to June 30, 2014. |
| |
| 99.3 | | Unaudited pro forma condensed consolidated balance sheet of Western Refining Logistics, LP as of June 30, 2014 and the unaudited pro forma condensed consolidated statement of operations for Western Refining Logistics, LP for the six months ended June 30, 2014 and the years ended December 31, 2011, 2012 and 2013. |
| † | Confidential status has been requested for certain portions thereof pursuant to a Confidential Treatment Request filed October 16, 2014. Such provisions have been filed separately with the Securities and Exchange Commission. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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| | WESTERN REFINING LOGISTICS, LP By: Western Refining Logistics GP, LLC, its general partner |
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| Dated: October 16, 2014 | | By: | | /s/ Gary R. Dalke |
| | Name: Gary R. Dalke Title: Chief Financial Officer |
EXHIBIT INDEX
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Exhibit
Number | | Description |
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| 10.1† | | Product Supply Agreement, dated October 15, 2014, by and among Western Refining Southwest, Inc., Western Refining Company, L.P. and Western Refining Wholesale, LLC. |
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| 10.2† | | Fuel Distribution and Supply Agreement, dated October 15, 2014, by and between Western Refining Wholesale, LLC and Western Refining Southwest, Inc. |
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| 10.3† | | Crude Oil Trucking Transportation Services Agreement, dated October 15, 2014, by and among Western Refining Wholesale, LLC, Western Refining Company, L.P. and Western Refining Southwest, Inc. |
| |
| 23.1 | | Consent of Deloitte & Touche LLP. |
| |
| 99.1 | | Joint Press Release of Western Refining Logistics, LP and Western Refining, Inc. issued October 15, 2014. |
| |
| 99.2 | | Audited combined financial statements of the Business as of and for the years ended December 31, 2012 and 2013; unaudited combined balance sheet of the Business as of June 30, 2014 and unaudited combined statements of operations and cash flows of the Business for the six months ended June 30, 2014 and June 30, 2013 and unaudited combined statement of segment equity of the Business from December 31, 2011 to June 30, 2014. |
| |
| 99.3 | | Unaudited pro forma condensed consolidated balance sheet of Western Refining Logistics, LP as of June 30, 2014 and the unaudited pro forma condensed consolidated statement of operations for Western Refining Logistics, LP for the six months ended June 30, 2014 and the years ended December 31, 2011, 2012 and 2013. |
| † | Confidential status has been requested for certain portions thereof pursuant to a Confidential Treatment Request filed October 16, 2014. Such provisions have been filed separately with the Securities and Exchange Commission. |
