SemGroup to sell Mexican Asphalt Business to fund HFOTCO acquisition
The SemGroup Corporation has agreed to sell its asphalt business, SemMaterials México, to Ergon Asfaltos México HC, LLC, for $70m and will use the cash raised to fund the acquisition of Houston Fuel Oil Terminal Company (HFOTCO) and to pre-fund capital growth projects.
SemGroup President and Chief Executive Officer, Carlin Conner said: “Divesting these non-core legacy assets is an important step as we raise capital and clearly define our portfolio of uniquely-advantaged midstream services on the Gulf Coast, Mid-Continent and in Canada. As we enter 2018, we remain focused on executing our strategic plan, enhancing our balance sheet and paying the second HFOTCO payment.”
SemMaterials México provides asphalt products, technology and pavement services to the Mexico paving market. The business includes 14 in-country terminals and two national laboratories. It is the largest supplier of liquid asphalt cement products and product application services in the country and has a presence in every Mexican territory.
Carlin said: “I would like to thank the employees of SemMaterials for the many years they’ve committed to safety, sound operations and fiscal excellence. They’ve built an impressive business that should be an excellent addition to Ergon’s portfolio.”
The SemMaterials México sale is expected to close early in the second quarter of 2018, subject to the receipt of certain governmental approvals and the satisfaction of other customary closing conditions.
President of Ergon Asphalt & Emulsions, Inc, Baxter Burns said: “As Ergon has expanded our footprint from coast to coast in the U.S. over the past 36 years, we have been interested in moving into Mexico. The similarities between Ergon and SemMaterials México, from company culture and focus on employees, technology, quality products and safety, made this a perfect fit. We look forward to working with their existing management team and current staff to take Ergon Asfaltos México to the next level.”
For more information visit www.semgroupcorp.com
9th Jan 2018