Despite the Wall Street rally, and enthusiasm for new energy limited partnerships, Alon USA Partners LP, a subsidiary of Alon USA Energy Inc. (NYSE:ALJ), raised less than hoped in its IPO on the New York Stock Exchange yesterday. It will be traded under the ticker "ALDW".
Alon USA Partners owns the Big Spring Refinery, previously owned by Alon USA Energy. Alon USA Partners issued ten million participation units at $16 per unit, well below its target price of $19-21. The company raised a gross $160 million, less than its $190-210 million target. The company value of $1.2-1.3 billion was as planned.
Goldman, Sachs & Co., Credit Suisse Securities (USA) LLC, and Citigroup are the joint book-running managers, Jefferies & Company, Inc. is the lead managing underwriter, and Macquarie Capital (USA) Inc. and Tudor, Pickering, Holt & Co. Securities, Inc. are the co-managers The underwriters have an overallotment option to buy up to additional 1.5 million participation units, which, if exercised in full, will increase the IPO proceeds by $24 million.
Products from the Big Spring Refinery in Texas are sold to other Alon USA Energy subsidiaries, including Alon Brands Inc., which had sought to go public on Wall Street.
Following the IPO, Alon USA Energy owns 84% of Alon USA Partners. Alon USA is a subsidiary of Alon Israel Oil Company Ltd., owned by chairman David Weissman and Shraga Biran.
The IPO by Alon USA Partners follows the IPO by Yitzhak Tshuva's Delek US Holdings Inc. (NYSE:DK) subsidiary Delek Logistics Partners LP (NYSE: DKL), which raised $193.2 million, including through the exercise of the over-allotment option, at a company value of $504 million in October.
Published by Globes [online], Israel business news - www.globes-online.com - on November 20, 2012
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