Sunoco LP to acquire NuStar Energy in all-equity transaction valued at $7.3B

Sunoco LP (SUN) (“Sunoco” or the “Partnership”) and NuStar Energy (NS) announced that the parties have entered into a definitive agreement whereby Sunoco will acquire NuStar in an all-equity transaction valued at approximately $7.3B, including assumed debt. Under the terms of the agreement, NuStar common unitholders will receive 0.400 Sunoco common units for each NuStar common unit, implying a 24% premium based on the 30-day VWAP’s of both NuStar and Sunoco as of January 19. Sunoco has secured a $1.6B 364-day bridge term loan to refinance NuStar’s Series A, B and C Preferred Units, Subordinated notes, revolving credit facility, and receivables financing agreement. The transaction has been unanimously approved by the board of directors of both companies and is expected to close in the second quarter of 2024 upon the satisfaction of closing conditions, including approval by NuStar’s unitholders and customary regulatory approvals. The company expects the transaction to be immediately accretive with 10%+ accretion to distributable cash flow per LP unit by the third year following close. At least $150M of run-rate synergies by the third year following close is expected. Prior to closing, NuStar will make a cash distribution of $0.212 per common unit to its common unitholders.