| Item 1.01 | Entry into a Material Definitive Agreement. |
On November 12, 2018, HollyFrontier LSP Holdings LLC (the “Purchaser”), a wholly-owned subsidiary of HollyFrontier Corporation (“HollyFrontier”), entered into an equity purchase agreement (the “Equity Purchase Agreement”) with Sonneborn Holdings, L.P. and SonnebornCo-Op LLC (collectively, the “Sellers”) pursuant to which the Purchaser will acquire 100% of the issued and outstanding capital stock of Sonneborn US Holdings Inc. and 100% of the membership rights in Sonneborn Coöperatief U.A. (collectively, “Sonneborn”), for cash consideration of $655 million, including working capital with an estimated value of $72 million (the “Acquisition”).
The purchase price for the Acquisition is subject to customary adjustments at closing for working capital of Sonneborn. The Acquisition is expected to close in 2019, subject to customary closing conditions and the receipt of certain regulatory approvals, including the termination or expiration of any waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended and authorizations under the applicable competition laws of Germany and the United Kingdom.
The Equity Purchase Agreement provides for customary representations and warranties, covenants and termination rights, including a termination right for each of the Purchaser and the Sellers if the closing does not occur by August 12, 2019 (the “Outside Date”), except that the Outside Date can be extended by either party by up to three 90 day periods to obtain required regulatory approvals. The Equity Purchase Agreement also provides for the payment of a $30 million termination fee by the Purchaser to the Sellers upon the termination of the Equity Purchase Agreement if either the Purchaser or the Sellers terminate the Equity Purchase Agreement prior to the closing of the Acquisition as a result of the failure to obtain regulatory approvals or a failure to close the Acquisition prior to the Outside Date.
HollyFrontier has guaranteed all payment and performance obligations of the Purchaser that relate to or arise under the Equity Purchase Agremeent.
The disclosure contained in this Item 1.01 does not purport to be a complete description of the Equity Purchase Agreement and is qualified in its entirety by reference to the Equity Purchase Agreement, which is filed as Exhibit 2.1 hereto and is incorporated by reference into this Item 1.01.
The Equity Purchase Agreement has been attached as an exhibit to this report to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about the parties thereto or to modify or supplement any factual disclosures about HollyFrontier or its subsidiaries or its affiliates in their public reports filed with the U.S. Securities and Exchange Commission (the “SEC”). The Equity Purchase Agreement includes representations, warranties and covenants of the parties thereto made solely for purposes of the Equity Purchase Agreement and solely for the benefit of the parties to the Equity Purchase Agreement, and which may be subject to important qualifications and limitations agreed to by the parties in connection with the negotiated terms of the Equity Purchase Agreement. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties to the Equity Purchase Agreement or any of their respective subsidiaries or affiliates. Moreover, some of those representations and warranties may not be accurate or complete as of any specified date, may be subject to a contractual standard of materiality different from those generally applicable to the SEC filings of the parties or may have been used for purposes of allocating risk among the parties to the Equity Purchase Agreement rather than establishing matters as facts.
| Item 7.01 | Regulation FD Disclosure. |
On November 13, 2018, HollyFrontier issued a press release announcing the Acquisition and an investor presentation related to the Acquisition, copies of which are being furnished herewith as Exhibit 99.1 and Exhibit 99.2, respectively.
The information provided in this Item 7.01 and the accompanying Exhibit 99.1 and Exhibit 99.2 shall not deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference in any filing made by HollyFrontier pursuant to the Securities Act of 1933, as amended, other than to the extent that such filing incorporates by reference any or all of such information by express reference thereto.
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