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NuStar Energy L.P. Message Board

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  • rrb1981 rrb1981 May 14, 2010 10:00 AM Flag

    Secondary?

    I suspect an acquisition is in the waiting. $250 million in proceeds flowing into the coffers. I wonder if they are targeting some terminals abroad. They have a strong desire to go international. They have had success with the few "foreign" assets that they hold...or it could be that perhaps they are landing some domestic assets from the majors...we keep hearing that the majors are looking to divest, but nothing ever happens.

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    • It is highly unlikely that the proceeds will be used for a "major" acquisition. $250M is really significant for a company with over $4 billion in assets. More likely a small aquisition and/or the paydown of debt.

      • 1 Reply to mak1246
      • Well, if you look at NuStar's habit of financing acquisitions with about 50% equity and 50% debt, that would give NuStar around $500 million, which would be a nice sized acquisition relative to their current market cap.

        A $500 million dollar deal would be significant, provided it was made at around a 7x multiple. You could potentially see as much as 5% distribution growth from that size deal.

 
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