Acquisition by Delek
Alon USA Partners (ALDW), the MLP formed by Alon USA Energy, stands third among top MLP gainers in 2017. ALDW has risen more than 40% year-to-date. Delek US Holdings (DK) completed the acquisition of Alon USA Energy in July 2017. On November 8, 2017, Delek announced the acquisition of all outstanding Alon USA Partners units it does not already own. Delek already owns 81.6% of ALDW’s outstanding units. The transaction is expected to close in 1Q18.
Improved crack spreads contributed to refining MLPs’ performance in 2017. Notably, all three refining MLPs—Calumet Specialty Products Partners (CLMT), CVR Refining (CVRR), and ALDW—appear in the list of top ten MLP gainers in 2017.
Alon USA Partners’ 3Q17 operating margin was $15.92 per barrel, compared with $9.22 per barrel in 3Q16. The increase was primarily due to the Gulf Coast 3-2-1, WTI Cushing, and WTI Midland spreads widening, and a stronger wholesale marketing environment. Another recently acquired MLP appears in the list of top ten MLP gainers—Southcross Energy Partners (SXE). Let’s discuss it next.