July 16, 2014
Flint Hills Resources, LLC (“Flint Hills Resources” or the “company”) announced it is moving forward with a significant expansion of its chemicals business with the completion of its acquisition of PetroLogistics LP (NYSE: PDH) (“PetroLogistics”) and its general partner, PetroLogistics GP LLC (“MLP GP”). The $2.1 billion transaction is the largest in the company’s history and the first chemical asset it has acquired since purchasing Huntsman Corporation’s U.S. commodity chemical business in 2007.
The acquisition was finalized through the merger of Flint Hills Resources’ subsidiary, FHR Propylene, LLC, with and into PetroLogistics. As a result of the merger, all of PetroLogistics’ outstanding common units were converted into the right to receive $14.00 per common unit in cash, except for those common units owned by Lindsay Goldberg LLC, York Capital Management, MLP GP’s Executive Chairman and its President and Chief Executive Officer, which were acquired for $12.00 per common unit in cash. Additionally, all holders of record of common units on July 15, 2014 will receive a special, one-time distribution of $0.40 per common unit.
Flint Hills Resources will operate PetroLogistics’ propylene facility, which is located in Houston, as part of its chemical and refining business.
“The PetroLogistics Houston plant is one of the most advanced facilities of its kind in the world and an exciting addition to our chemicals business,” said Brad Razook, Flint Hills Resources President and Chief Executive Officer. “Its capabilities are well aligned with our existing chemical and refining operations and will strengthen our ability to compete globally and create additional value for our customers.”
PetroLogistics began operations in 2010 and has an annual production capacity of approximately 1.45 billion pounds. Propylene is one of the basic building blocks for petrochemicals and is used in the production of a variety of end uses including paints, coatings, building materials, clothing, automotive parts, packaging and a range of other consumer and industrial products.
“The facility has a very talented workforce, many of whom have been there from the start, and are credited with helping establish a world-class operation,” said Razook. “We’re pleased to welcome them to Flint Hills Resources as we work together to build on their success.”
Flint Hills Resources is a leading refining, chemicals and biofuels company with operations primarily in Texas and the Midwest. Its manufacturing capability is built upon six decades of refining experience. The company has expanded its production capacity through acquisitions and capital projects worth more than $8.6 billion since 2002. Flint Hills Resources is a subsidiary of Koch Industries Inc., one of America’s largest private companies.
As a result of the merger, PetroLogistics will cease to be a publicly traded company and its common units will no longer be traded on the New York Stock Exchange or any other securities exchange.