Alinda Capital Partners is selling the Houston Fuel Oil Terminal Company, a 16.8-million-barrel terminal and a major player in the Gulf of Mexico, to Tulsa-based SemGroup for $2.1 billion, the firms announced Tuesday.
Alinda had not responded to a request for comment regarding return on investment at press time.
“Consistent with our strategy to diversify our portfolio and become more refinery-facing, HFOTCO brings a well-established base of high-quality, long-tenured customers,” said SemGroup chief executive Carlin Conner. He added that the deal leaves SemGroup “uniquely positioned to capture the future trends in exporting crude oil and refined products resulting from the US shale boom”.
The deal will consist of two payments: $1.5 billion, including the assumption of around $785 million in debt, at closing, and the remaining $600 million before the end of 2018. The deal is expected to close in the third quarter of 2017.
The transaction gives SemGroup a position in the Houston Ship Channel, part of the Port of Houston, the US’s second-largest port. SemGroup, a midstream company with assets in the US, Canada, Mexico and the UK, said it plans to maintain the company’s workforce.
“We believe that adding this asset to SemGroup’s portfolio is a great way to leverage customer relationships, strengthen both businesses and create additional shareholder value,” said Alinda managing partner Chris Beale.
Alinda acquired HFOTCO, located on 330 acres of the Houston Ship Channel, in November 2011 from an ArcLight Capital Partners affiliate.