Flint Hills Resources LLC, a subsidiary of Koch Industries Inc., has entered into a definitive agreement to acquire PetroLogistics and its general partner PetroLogistics GP LLC for $1.2 billion. The deal is expected to close before yearend.
Completion of the transaction is subject to a requirement that PetroLogistics’ facility perform at a certain level of production for a period of 4 days before the closing, and to PetroLogistics’ receipt of a legal opinion regarding certain tax matters.
Under the merger agreement, PetroLogistics retains the right through July 6, under certain conditions, to provide certain information to and enter into discussions and negotiations with any third party that submits an unsolicited qualifying superior acquisition proposal.
Flint Hills would have the opportunity to match such a proposal, but PetroLogistics would be able to terminate the merger agreement with Flint Hills and enter into or recommend a transaction with the third party that submitted the proposal, paying a resulting $57 million termination fee to Flint Hills.
PetroLogistics is a major producer of propylene with operations in the vicinity of the Houston Ship Channel. The company owns and operates the only propane dehydrogenation facility in the US, which has a production capacity of 1.45 billion lbs.