Sprague Resources LP (Sprague) has announced that its operating subsidiary, Sprague Operating Resources LLC, has signed a definitive agreement to purchase the Springfield, Massachusetts refined product terminal assets of Leonard E. Belcher, Incorporated (L.E. Belcher) for approximately US$20 million in cash, subject to customary closing adjustments. The purchase consists of two pipeline-supplied distillate terminals and one distillate storage facility with a combined capacity of 295 000 bbls, as well as L.E. Belcher’s associated wholesale and commercial fuels businesses. The transaction is expected to close within 30 days.
Sprague has previously supplied the L.E. Belcher terminals and is well known along the I-91 corridor in western Massachusetts. Following successful closing of the transaction, Sprague will own the largest distillate tankage position in the area, supplying heating oil, diesel fuel and kerosene into regions not served by its existing network of deep water terminals on the coast. The transaction is expected to be accretive to distributable cash flow and generate approximately US$3 to US$4 million of adjusted EBITDA annually. Sprague intends to fund the transaction with borrowings from its senior secured credit facility.
“We have long considered L.E. Belcher’s business and terminal assets as one of the best in New England, and are pleased to be chosen as the team to carry the Hough family legacy of customer service in the Springfield region into the future,” announced David Glendon, President and Chief Executive Officer. “As a supplier to L.E. Belcher for many years, we know the market very well and are looking forward to welcoming new employees to the Sprague team. Our acquisition strategy of pursuing high quality assets in strategic locations has once again paid off with an attractive bolt-on purchase in one of the few remaining Northeast markets where Sprague did not control a terminal asset.”
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