Tulsa-based SemGroup Corporation announced it has sold its SemLogistics business unit in the United Kingdom to Valero. The UK operation was a petroleum storage facility and the purchaser is Valero Logistics UK Ltd, a subsidiary of Valero Energy Corporation.
SemGroup did not reveal the sales price but under the deal, potential earnout payments will be made to SemGroup if certain revenue targets are met in the four years after the close of the transaction.
The Tula company said it will use proceeds from the sale toward its capital raise plan and to pre-fund capital growth projects.
“We are pleased to execute this transaction and to reach another milestone in our plan to divest non-core legacy assets and move forward with a more focused North American midstream strategy,” said SemGroup President and Chief Executive Officer Carlin Conner.
The SemLogistics sale is expected to close by the end of the third quarter of 2018, subject to the receipt of certain governmental approvals and the satisfaction of other customary closing conditions.
“This facility complements our Pembroke refinery and fuel terminal in the UK and Ireland making it a natural fit for the company,” said Joe Gorder, Valero Chairman, President and Chief Executive Officer. “This purchase demonstrates Valero’s commitment to Wales and the UK, and it aligns with our strategy to grow the logistics business and reduce secondary costs,” added Gorder.