MOSCOW (MRC) -- Westlake Chemical Partners has agreed to acquire an additional 4.50% limited partner interest in Westlake Chemical OpCo on a fully diluted basis for approximately USD201.4M, as per TheFly.
The purchase price for the acquisition represents an enterprise value multiple of approximately 10.5x of OpCo's expected 2019 EBITDA.
The Partnership intends to finance the acquisition with borrowings under its revolving credit facility and the proceeds of a private placement of 2,940,818 common units representing limited partner interests of the Partnership to certain institutional investors and an entity for the benefit of certain family members of Albert Chao and James Chao, each of whom serve on the board of directors of Westlake Chemical Partners.
The private placement will result in gross proceeds of approximately USD62.9M. The acquisition is expected to close on March 29 and be immediately accretive to the Partnership's MLP distributable cash flow. The acquisition will increase the Partnership's limited partner interest in OpCo from approximately 18.3% to approximately 22.8%.
OpCo sells approximately 95% of its ethylene production to Westlake Chemical Corporation under a long-term supply agreement.
The acquisition and the affiliate entity's participation were approved by a Conflicts Committee, which is composed entirely of independent directors of the Board.
As MRC informed before, in early 2018, Westlake Chemical Corporation announced that it will expand capacities for the production of polyvinyl chloride (PVC) and vinyl chloride monomer (VCM) at three of its chemical facilities. Two of the plants are located in Germany (Burghausen, Gendorf) and one is located in Geismar, Louisiana. The expansions in Burghausen and Geismar are expected to be completed in 2019. The Gendorf expansions are expected to be completed in 2020 and 2021.
Westlake Chemical Corporation is an international manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, chlor-alkali and derivative products, PVC suspension and specialty resins, PVC Compounds, and PVC building products including siding, pipe, fittings and specialty components, windows, fence, deck and film.