Deal Description: July 20, 2016 – Blueknight Energy Partners, L.P. (NASDAQ: BKEP) (Common Units) (NASDAQ: BKEPP) (Series A Preferred Units) ("BKEP"), announced today that Ergon Asphalt & Emulsions, Inc., a subsidiary of Jackson, Mississippi-based Ergon, Inc. ("Ergon"), has agreed to purchase 100% of the membership interests of Blueknight GP Holding, L.L.C., which owns 100% of the outstanding membership interests of the general partner of BKEP, which owns the general partner interest and the incentive distribution rights of BKEP. Ergon also has agreed to (i) contribute nine asphalt terminals it currently owns plus $22.1 million of cash to BKEP in return for total consideration of approximately $130.9 million, which consists of the issuance of 18,312,968 Series A preferred units in a private placement, and (ii) acquire an aggregate of $5.0 million of common units for cash in a private placement. In addition, BKEP has agreed to repurchase 13,335,390 of its Series A preferred units currently owned by Blueknight Energy Holding, Inc. and CB-Blueknight, LLC (collectively, the "Existing Sponsors") for $95.3 million. The Existing Sponsors will retain their remaining 4,977,578 Series A preferred units.
The nine terminals acquired by BKEP from Ergon are located in Wolcott, Kansas; Ennis, Texas; Chandler, Arizona; Mt. Pleasant, Texas; Pleasanton, Texas; Birmingport, Alabama; Memphis, Tennessee; Nashville, Tennessee; and Yellow Creek, Mississippi, and include approximately 2.0 million barrels of storage capacity. Once the transactions described above have closed, BKEP will own a network of 54 asphalt terminals in 26 states with a combined capacity of 10.2 million barrels of asphalt and residual fuel oil storage.
Baker Botts L.L.P. represented Ergon in the transaction.
Client: Ergon, Inc.
Outside Counsel to Ergon: Baker Botts L.L.P.
Additional Counsel to Ergon: Kevin Watson (Watson Heidelberg Jones, PLLC)
Financial Advisor to Ergon: Wells Fargo Securities LLC
Other Parties: Blueknight Energy Partners, L.P.; Affiliates of Vitol Holding B.V.; Affiliates of Charlesbank Capital Partners, LLC
Baker Botts Lawyers/Office Involved: Corporate: Gerald Spedale (Partner, Houston); A.J. Ericksen (Partner, Houston); Chris Marshall (Associate, Houston); Jude Dworaczyk (Associate, Houston); Tax: Don Lonczak (Partner, Washington); Mike Bresson (Partner, Houston); Peter Farrell (Associate, Washington); Real Estate: Chris Wilson (Partner, Houston); Whitney Crayton (Associate, Houston)
For more information, please see Blueknight’s news release by clicking here.
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