Hartree Partners, LP entered into a definitive agreement and plan of merger to acquire remaining 25.5% stake in Sprague Resources LP from Sprague Resources GP LLC and others for approximately $130 million.
The transaction is subject to the negotiation and execution of a mutually acceptable merger agreement and appropriate supporting agreements which would set out all of the terms and conditions relevant to the proposed transaction. These agreements, if executed, would be subject to customary closing conditions, including any necessary regulatory approvals. Under Sprague's partnership agreement, the transaction is required to be approved by the holders of a majority of the outstanding common units. The Board of Directors of Sprague Resources GP LLC, the general partner of Sprague (the GP Board), delegated to a conflicts committee of the GP Board (the Sprague Conflicts Committee), consisting solely of the GP Board's three independent directors, the authority to review, evaluate, negotiate and approve the transaction on behalf of the GP Board. The Sprague Conflicts Committee, after evaluating the transaction with its legal counsel and independent financial advisor, unanimously approved the Agreement and determined it to be in the best interests of Sprague and Sprague's unitholders unaffiliated with Hartree.
The transaction is expected to close prior to the end of Q3 2022, subject to customary closing conditions. As of August 19, 2022, the transaction is expected to close on or about September 1, 2022. As of August 31, 2022, following execution of the Amendment, the Partnership expects that the Merger will close in the fourth quarter of 2022. Following a final review of the Merger Agreement Amendment by Latham, the members of the Conflicts Committee unanimously determined that the Merger Agreement Amendment was in the best interests of the Partnership and the Unaffiliated Unitholders and approved the Partnership's entry into the Merger Agreement Amendment. As of October 21, 2022, the Partnership anticipates that the merger will close on or about November 1, 2022. Evercore Group L.L.C. acted as financial advisor with a service fee of $2 million and David Oelman and Lande Spottswood of Vinson & Elkins LLP acted as legal advisor to Sprague Resources. Bill Finnegan, Ryan J. Maierson and Ryan J. Lynch acted as legal advisors to Sprague Resources and Conflicts Committee. The Sprague Conflicts Committee engaged Jefferies LLC as financial advisor with a service fee of $0.5 million, due diligence provider and fairness opinion provider with a service fee of $1.5 million. William N. Finnegan IV, Ryan J. Lynch and Ryan J. Maierson of Latham & Watkins LLP acted as legal advisor and due diligence provider to Conflicts Committee of Sprague Resources LP.