SemGroup Exits Asphalt Business to Focus on Houston Oil Terminal Acquisition

Tulsa-based SemGroup Corporation will sell its asphalt business, SemMaterials México, to Ergon Asfaltos México HC, LLC, for an estimated $70 million including a reimbursement of nearly $15 million of net working capital, according to a company press release issued on Monday.

SemGroup intends to use proceeds from the sale toward its capital raise plan associated with the acquisition of Houston Fuel Oil Terminal Company (HFOTCO) and to pre-fund capital growth projects.

“Divesting these non-core legacy assets is an important step as we raise capital and clearly define our portfolio of uniquely-advantaged midstream services on the Gulf Coast, Mid-Continent and in Canada,” said Carlin Conner, SemGroup President and Chief Executive Officer. “As we enter 2018, we remain focused on executing our strategic plan, enhancing our balance sheet and paying the second HFOTCO payment.”

SemMaterials México provides asphalt products, technology and pavement services to the Mexico paving market. The business includes 14 in-country terminals and two national laboratories. It is the largest supplier of liquid asphalt cement products and product application services in the country and has a presence in every Mexican territory.

The SemMaterials México sale is expected to close early in the second quarter of 2018, subject to the receipt of certain governmental approvals and the satisfaction of other customary closing conditions, according to the press release.