Sprague Resources Reported an Acquisition Agreement by Hartree Partners

Jun 3, 2022 By MarketDepth

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Sprague Resources LP (NYSE: SRLP) reported on Friday that it has entered into a definitive agreement and plan of merger pursuant to which an affiliate of Hartree Partners, LP will acquire all of the outstanding common units of Sprague not already owned by Hartree and its affiliates. 

All Cash Transaction

According to the agreement, the acquisition is an all-cash transaction, whereby each holder of the Common Units will receive $19.00 per common unit owned, representing a 27.3% premium to the closing price of the common units on January 10, 2022, the day prior to Hartree’s offer, and an 18.9% premium to the closing price of the common units as of June 1, 2022.

Sale and Distribution of Petroleum

Sprague Resources LP is a master limited partnership engaged in the purchase, storage, distribution and sale of refined petroleum products and natural gas. Sprague also provides storage and handling services for a broad range of materials.

Approval of Transaction

The Board of Directors of Sprague Resources GP LLC, the general partner of Sprague (the “GP Board”), delegated to a conflicts committee of the GP Board (the “Sprague Conflicts Committee”), consisting solely of the GP Board’s three independent directors, the authority to review, evaluate, negotiate and approve the transaction on behalf of the GP Board. The Sprague Conflicts Committee, after evaluating the transaction with its legal counsel and independent financial advisor, unanimously approved the Agreement and determined it to be in the best interests of Sprague and Sprague’s unitholders unaffiliated with Hartree.

The transaction is expected to close prior to the end of Q3 2022, subject to customary closing conditions.