Summary
Valero Energy Corporation (VLO) has completed the acquisition of Orion Refining Corporation's refinery located in St. Charles Parish, Louisiana. This strategic move, finalized on July 1, 2003, significantly expands Valero's operational capacity with the addition of a refinery boasting a total throughput capacity of approximately 185,000 barrels per day (bpd) and a crude oil capacity of 155,000 bpd. The transaction involved a purchase price of $400 million for the refinery assets, plus approximately $145 million for hydrocarbon inventories. The consideration was met through a combination of $250 million in mandatory convertible preferred stock and the remainder in cash. The preferred stock is set to automatically convert into Valero common stock within three years. Additionally, the agreement includes potential earn-out payments tied to specified refining margins over seven years, with annual and aggregate caps.
Key Highlights
- 1Valero Energy Corporation acquired Orion Refining Corporation's St. Charles Parish, Louisiana refinery on July 1, 2003.
- 2The acquired refinery has a substantial capacity: 185,000 bpd total throughput and 155,000 bpd crude oil capacity.
- 3The total purchase price was $400 million for the refinery, plus $145 million for hydrocarbon inventories.
- 4The acquisition was financed with $250 million in mandatory convertible preferred stock and cash.
- 5The preferred stock will automatically convert into Valero common stock in three years.
- 6Potential earn-out payments are included, contingent on performance, with an aggregate limit of $175 million over seven years.
- 7Financial statements and pro forma information for the acquired business will be filed via amendment within 60 days.