Delek Logistics buys two sets of Texas assets

$100M purchase from mothership should push up Q3 distribution

Delek US Logistics said Monday morning it has paid Delek US Holdings, its majority shareholder and the company from which it was spun out last year, about $95 million for almost 100 storage tanks and a product terminal in Tyler, Texas.

The move, the first of a number that have been planned since last fall's Delek Logistics IPO, will grow the infrastructure master limited partnership's expected EBITDA by more than 21 percent and enable it to increase its quarterly payout to investors. Chairman and CEO Uzi Yemin said Delek Logistics expects to distribute 40.5 cents per partner unit for the quarter ended Sept. 30, up from 38.5 cents so far this year.

Word of the Tyler purchase comes a few days after Delek Logistics filed papers with the Securities and Exchange Commission saying it also has acquired a pipeline, storage yard and other assets from an affiliate of Enterprise Products Partners. Those assets are in the Hopewell, Texas, area south of Tyler and feed into the idled Big Sandy terminal under Delek Logistics' umbrella. Keith Johnson, Delek Logistics' vice president of investor relations, said the company will soon look into just what it will take to restart the Big Sandy terminal so that it can receive refined products from Delek US' Tyler complex.

In early Monday morning trading, Delek Logistics' partner units (Ticker: DKL) were up slightly to $32.35. Year to date, they've risen about 40 percent.