TULSA, Okla., Jan. 08, 2018 (GLOBE NEWSWIRE) -- SemGroup® Corporation (NYSE:SEMG) today announced that it has reached an agreement to sell its asphalt business, SemMaterials México, to Ergon Asfaltos México HC, LLC, for an estimated $70 million including a reimbursement of approximately $15 million of net working capital, subject to customary post-closing adjustments. SemGroup intends to use proceeds from the sale toward its capital raise plan associated with the acquisition of Houston Fuel Oil Terminal Company (HFOTCO) and to pre-fund capital growth projects.
“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,” said SemGroup President and Chief Executive Officer Carlin Conner. “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.
“I would like to thank the employees of SemMaterials for the many years they’ve committed to safety, sound operations and fiscal excellence,” said Conner. “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.
“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,” said Baxter Burns, President of Ergon Asphalt & Emulsions, Inc. “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.”
About Ergon Asphalt & Emulsions, Inc.
Ergon Asphalt & Emulsions, Inc., is a subsidiary of Ergon, Inc., a group of privately held companies that operate under six primary business segments: Refining & Marketing, Asphalt & Emulsions, Transportation & Terminaling, Oil & Gas, Real Estate and Corporate & Other. Ergon is based in Jackson, Miss.
Based in Tulsa, Okla., SemGroup® Corporation (NYSE:SEMG) is a publicly traded midstream service company providing the energy industry the means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end-users and consumers of crude oil, natural gas, natural gas liquids, refined products, residual fuel oil and asphalt. Services include purchasing, selling, processing, transporting, terminalling and storing energy.
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