NTQ Acquisition (stock symbol: NTQ), which raised $240 million when it went public on January 31, 2007, has announced that it is acquiring Kern Oil & Refining:
NTR Acquisition Co. to Acquire Kern Oil & Refining Co.
Monday November 5, 7:30 am ET
NTR Announces First Acquisition of Targeted Refining Assets
NTR To Become NTR Energy Co.
DANBURY, Conn. & BAKERSFIELD, Calif.--(BUSINESS WIRE)--NTR Acquisition Co. (“NTR”) (AMEX, Units: NTQ.U, Common Stock: NTQ, Warrants: NTQ.WS), a special purpose acquisition company focused on the petroleum refining and marketing industry, today announced that it has agreed to acquire Kern Oil & Refining Co. (“Kern”), a privately-held independent petroleum refining and marketing company from Casey Co., Kern’s sole shareholder. Under the terms of the acquisition, NTR will pay cash consideration of $286.5 million. In addition, NTR will acquire for cash inventory and other net working capital of Kern at the time of closing, currently estimated by the seller to be $35 million. The acquisition, which was unanimously approved by NTR’s Board of Directors, is subject to NTR shareholder approval, applicable regulatory approvals and other customary closing conditions. NTR anticipates completing the transaction in the first quarter of 2008.
In connection with this acquisition, Occidental Petroleum Corporation (NYSE: OXY - News) (“Occidental”) has agreed to make a $35 million investment in NTR in the form of a convertible preferred security. Occidental, currently a crude oil supplier to Kern, has significant oil production operations in California.
Following the closing of the transaction, NTR Acquisition Co. plans to change its name to NTR Energy Co. and its units, common stock and warrants will continue to be listed on AMEX under the tickers NTQ.U, NTQ and NTQ.WS, respectively.
Located in Bakersfield, CA, Kern’s refinery has a rated crude oil processing capacity of 27,000 barrels per stream day. Its product slate consists of California-approved gasoline and diesel fuel, atmospheric gas oil, fuel oil and aliphatic solvents, which are marketed in California and neighboring states. Kern processes primarily San Joaquin Valley crude oils. The refinery operations generated, according to Kern’s records, an annual average EBITDA of $57 million in the 2004 to 2006 period and approximately $44 million in the first seven months of fiscal year 2007. As presented, EBITDA consists of earnings before interest, taxes, depreciation and amortization and is not a US GAAP measure. For the purpose of this calculation, EBITDA has been adjusted to exclude: a) the results of a business spun-off to the seller (as sole shareholder) earlier in 2007, b) historical hedging losses and gains, c) LIFO inventory reserve changes, and d) expenditures for discretionary management bonuses.
“Kern provides an ideal platform for NTR to execute its business plan with the availability of heavy crude oil, reliable operations and an experienced management team,” said Mario E. Rodriguez, Chief Executive Officer of NTR. “Working closely with Kern management, we have already identified strategic initiatives to expand the conversion capacity of the refinery and to improve its product yield, which represent exciting growth opportunities in the short and long-term. We are pleased to have agreed to our first acquisition within nine months of our IPO and we look forward to capitalizing on additional acquisition opportunities that, like Kern, fit within our stated investment criteria. In addition, our partnership with Occidental Petroleum will help us build on Kern’s success.”
“I am excited about NTR’s acquisition of Kern, and the company’s employees are looking forward to their new relationship with NTR,” said Larry Delpit, President of Casey Co., Kern’s parent company and its sole shareholder. “NTR’s commitment to upgrading Kern’s refining facilities is extremely encouraging and should provide the refinery significant increased profit potential. Kern has a great team of experienced, hard-working and dedicated employees, many of whom I have worked with for over thirty years, and I am pleased that NTR has recognized their contributions and accomplishments through this acquisition.”
Occidental’s strategic investment should further enhance NTR’s ability to make certain capital expenditures in Kern’s operations. These investments are expected to expand Kern’s conversion capacity and reconfigure the refinery to benefit from the availability of heavy California crude oil. They are also expected to result in the improvement of Kern’s refined products yield and better enable the company to supply the California market with clean fuels in a safe and environmentally sound manner.
NTR plans to finance the acquisition with cash on hand, proceeds from the issuance of the convertible preferred to Occidental Petroleum and has received a proposal for a $120 million senior secured revolving credit facility.
Simmons & Company International is serving as financial advisor to Kern. Cleary Gottlieb Steen & Hamilton LLP is serving as outside legal counsel for NTR and JonesDay is serving as outside legal counsel for Kern.
Investor Conference Call and Webcast
NTR will be hosting a conference call for investors at 10:00 AM Eastern / 7:00 AM Pacific. The dial-in details are:
Domestic: (866) 356-4279
International: (617) 597-5394
Participant Passcode: 50343133.
To access a webcast of the conference call, please register via NTR’s website: www.ntracq.com
<snip>
biz.yahoo.com |
