Delek Logistics Partners, LP Announces Pricing of Public Offering of Common Units
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Insights
Delek Logistics Partners, LP's announcement of a public offering of over 3 million common units at $38.50 each represents a significant capital influx for the company. The decision to use the net proceeds to repay outstanding borrowings under its revolving credit agreement suggests a strategic move to improve the company's balance sheet and reduce interest expenses. This action could potentially enhance Delek Logistics' financial flexibility and creditworthiness, which may be viewed favorably by investors and credit rating agencies. However, the dilution of Delek US Holdings, Inc.'s ownership from 78.7% to approximately 73.4% indicates a redistribution of equity that may affect control dynamics and dividend distributions.
The offering price of $38.50 per unit provides a snapshot of the market's current valuation of Delek Logistics' common units. It is essential to compare this pricing with the historical performance, peer valuations and industry benchmarks to assess market sentiment. The fact that the offering is being made pursuant to a shelf registration statement indicates a pre-planned financing strategy, allowing for a faster response to market conditions. Monitoring the underwriters' option to purchase additional common units will provide insights into the demand for the offering and could signal market confidence in Delek Logistics' growth prospects and financial health.
From a legal standpoint, the offering's compliance with the Securities Act of 1933 is crucial. The use of a preliminary prospectus supplement and an effective shelf registration statement ensures transparency and adherence to SEC regulations. Potential investors should be aware that the offering will not be available in jurisdictions where it would be unlawful prior to registration or qualification under the applicable securities laws. The legal framework surrounding this transaction is designed to protect both the issuer and the investors by providing all necessary information for an informed investment decision.
None of the common units offered in the offering will be purchased by Delek US Holdings, Inc. ("Delek Holdings"). As a result, Delek Holdings' ownership of the outstanding Delek Logistics common units will decline from
The offering is expected to settle and close on March 12, 2024, subject to the satisfaction of customary closing conditions.
Truist Securities, BofA Securities and Raymond James are acting as joint book-running managers for the offering. A copy of the preliminary prospectus supplement and accompanying base prospectus relating to the offering may be obtained from any of the underwriters, including Truist Securities at 3333 Peachtree Road NE, 9th Floor,
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. The offering may be made only by means of a prospectus and related prospectus supplement meeting the requirements of Section 10 of the Securities Act of 1933, as amended (the "Securities Act").
About Delek Logistics Partners, LP
Delek Logistics is a midstream energy master limited partnership headquartered in
Delek Holdings (NYSE: DK) owns the general partner interest as well as a majority limited partner interest in Delek Logistics and is also a significant customer.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, including statements regarding the closing of the offering and the anticipated use of the net proceeds therefrom. These statements may contain words such as "possible," "believe," "should," "could," "would," "predict," "plan," "estimate," "intend," "may," "anticipate," "will," "if," "expect" or similar expressions, as well as statements in the future tense, are made as of the date they were first issued and are based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Delek Logistics' control. Delek Logistics' actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including, but not limited to, market risks and uncertainties, including those which might affect the offering, and the impact of any natural disasters or public health emergencies. These and other potential risks and uncertainties that could cause actual results to differ from the results predicted are more fully detailed in Delek Logistics' filings and reports with the SEC, including the Annual Report on Form 10-K for the year ended December 31, 2023 and other reports and filings with the SEC.
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SOURCE Delek Logistics Partners, LP
FAQ
What is the price per unit for the common units in Delek Logistics' public offering?
What is the purpose of the public offering by Delek Logistics?
How will Delek Holdings' ownership in Delek Logistics change after the offering?
Who are the joint book-running managers for the offering?
When is the offering expected to settle and close?
