Business Context and Reporting Period
This Form 8-K was filed by PBF Energy Inc. and related entities on April 24, 2019. The report details a material definitive agreement entered into on the same date between PBF Logistics LP (the "Partnership") and PBF Energy Company LLC ("PBF LLC"). The transaction involves the acquisition of the remaining 50% membership interest in Torrance Valley Pipeline Company LLC ("TVPC"), which owns the 189-mile San Joaquin Valley Pipeline system supplying the Torrance refinery.
Key Financial Metrics and Transaction Details
- Transaction Consideration: $200.0 million in cash.
- Financing Sources:
- $135.0 million from a registered direct offering of common units.
- $65.0 million from a draw-down on the Partnership's senior secured revolving credit facility.
- Asset Capacity: The acquired pipeline system has a throughput capacity of approximately 110,000 barrels per day and includes 11 pipeline stations with approximately one million barrels of combined tankage.
- Operational Commitment: The minimum volume throughput commitment (MVC) under the mainline transportation services agreement will increase from approximately 70,000 barrels per day to 75,000 barrels per day.
Material Changes and Outlook
Following the closing of the transaction, expected in the second quarter of 2019, the Partnership will own 100% of TVPC. This consolidates ownership of the primary crude gathering and transportation lines (M55, M1, and M70 pipelines) for the Torrance refinery. The filing does not provide specific revenue, profit, or margin projections for the period, nor does it detail changes in debt or liquidity beyond the specific financing of this transaction.
Risks and Contingencies
The filing includes standard disclaimers regarding the Contribution Agreement. Representations and warranties made by the parties are qualified by disclosure schedules and may not reflect the actual state of facts at the time of the filing. Investors are cautioned not to rely on these representations as characterizations of current facts. The transaction is subject to the terms of the Contribution Agreement filed as Exhibit 2.1.
Key Facts for Investor Verification
- Confirmation of the closing date of the TVPC Acquisition in Q2 2019.
- Completion of the $135.0 million registered direct offering of common units.
- Execution of the amendment to the mainline transportation services agreement increasing the MVC to 75,000 barrels per day.
- Review of the full Contribution Agreement (Exhibit 2.1) for specific covenants and conditions not detailed in the summary.