Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?



IPO Preview: Valero Energy Partners (VLP)

By  +Follow December 10, 2013 5:05PM

Valero Energy Partners (VLP) is a fee-based, growth-oriented, traditional master limited partnership recently formed by its parent, Valero (VLO), which has a $25 billion market cap.

Eight other IPOs are scheduled for this week. The full IPO calendar can be found at IPOpremium.

(VLP) scheduled a $300 million IPO with a market capitalization of $1.2 billion at a price range midpoint of $20 for Wednesday, December 11, 2013, on the NYSE.


The Manager & Joint managers are J.P. Morgan, Barclays, Citi, RBC Capital Markets, Wells Fargo Securities. The Co-Managers are Mitsubishi UFJ Securities, SunTrust Robinson Humphrey, Credit Agricole CIB, Credit Suisse, Jefferies & Co., Mizuho Investors, RBS, Scotiabank/Howard Weil


VLP expects to yield 4.25% at the price range mid-point of $20.  The parent VLO retains all incentive distribution rights.

“Valero will serve as a critical source of our future growth by providing us opportunities to purchase additional transportation and logistics assets that Valero currently owns or may acquire or develop in the future.”   Page 2 S-1.


Valuation Ratios


Price /

Price /

Price /

Price /


12 mos, Sept '13

Cap (mm)






Valero Energy Partners LP (VLP)







Valero Energy (VLO)








The rating ispositive.  These kind of parent/spinoffs generally work, because there is a segment of VLO’s shareholders who will be enticed by a 4.25% yield versus 1.98% from the parent company,VLO.


VLP is a fee-based, growth-oriented, traditional master limited partnership recently formed by Valero -- $25 billion market cap (VLO) -- to own, operate, develop and acquire crude oil and refined petroleum products pipelines, terminals and other transportation and logistics assets. VLP will serve as Valero’s primary vehicle to expand the transportation and logistics assets supporting its business.

VLP’s initial assets consist of crude oil and refined petroleum products pipeline and terminal systems in the Gulf Coast and Mid-Continent regions of the United States (“U.S.”) that are integral to the operations of Valero’s refinery located in Port Arthur, Texas, its McKee refinery located in Sunray, Texas, and its refinery located in Memphis, Tennessee.

VLP generates revenue by charging tariffs and fees for transporting crude oil and refined petroleum products through its pipelines and terminals. Because VLP does not take ownership of or receive any payments based on the value of the crude oil or refined petroleum products that it handles and does not engage in the trading of any commodities, VLP has no direct exposure to commodity price fluctuations.

At the closing of this offering, VLP will enter into a master transportation services agreement with Valero with respect to VLP’s pipelines and a master terminal services agreement with Valero with respect to VLP’s terminals. These fee-based commercial agreements will initially be the source of all of VLP’s revenues and will have minimum quarterly throughput commitments, inflation escalators and initial terms of 10 years, which VLP believes will promote stable and predictable cash flows.


As a result of VLP’s contractual relationship with Valero under its commercial agreements and its direct connections to three of Valero’s refineries, VLP believes that its crude oil and refined petroleum product pipelines, terminals and storage facilities will not face significant competition from other pipelines, terminals and storage facilities for Valero’s crude oil or refined petroleum products transportation requirements to and from the refineries VLP supports.


VLP intends to pay minimum quarterly distributions of $0.2125 per unit ($0.85 per unit on an annualized basis) to the extent it has sufficient cash from operations after establishment of cash reserves and payment of fees and expenses, including payments to VLP’s general partner..

5% stockholders

Valero (VLO) is the parent.

Use of proceeds

VLP expects to net $277.9 million from its IPO. Proceeds are allocated as follows:

to pay revolving credit facility issuance costs of $1.7 million, and VLP will retain the remainder of the net proceeds of this offering for general partnership purposes, which may include funding potential future acquisitions from Valero and third parties and potential future organic expansion capital expenditures.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Liked What You Read? Join Equities.com and Connect With Your Favorite Financial Experts FOR FREE! Members of Equities.com gain access to our leading financial news and content, active social investment community, proprietary research tools including the 2014 Small-Cap Stars, E.V.A. reports and more.

Results for vlp
6 Oct 15 06:59:55
JBEM's latest homerun is CALA.Details here: https://t.co/HZX7dyxPsD $VJET $VKTX $VLGEA $VLO $VLP $VLY $VMC $VNDA
6 Oct 15 00:43:02
$VLP: Valero Energy Partners LP (NYSE:VLP) Analyst Price Target: http://t.co/uXYBu7Yb3B
5 Oct 15 22:01:05
$VLP: Valero Energy Partners Sees Large Volume Increase (VLP): http://t.co/Tq0Fuhh5gq
Sleek Money
5 Oct 15 21:55:40
Valero Energy Partners Sees Large Volume Increase $VLP http://t.co/aeEiG9dBWD
Kung Blao
5 Oct 15 18:33:34
We own $NFLX and $VLP/$VLOo http://t.co/9Dr3d1aSpT http://t.co/feVjEkYnbu
BNK Invest
5 Oct 15 15:50:36
Valero Energy Partners Breaks Above 200-Day Moving Average - Bullish for $VLP $MLPJ #energy http://t.co/py0fR1iBs3
5 Oct 15 12:27:38
Want automatic email alerts for $MONT $AAOI $FGL $VLP $ATHM? Subscribe to MarketBeat Daily http://t.co/nSJuDtfT4R
Anthony DePaola
5 Oct 15 10:46:02
$VLP smacking highs of the day. ^ near 10%
Alexander Morris
5 Oct 15 08:40:03
$VLP: 1mRunaway+:2 [+6%], 1NewHi, PrvCHi, 10:6Accel+, tf:0111111; TLM:3.8; ILM:0.8, PrvClGap+[+1.1%,fill:75%], 1WkHi+, DyVol:123T:0.9x:0.6x
Breaking News
5 Oct 15 02:45:02
$VLP: Company Shares of Valero Energy Partners LP (NYSE:VLP) Rally …: http://t.co/9HaYPPLZHl
4 Oct 15 18:28:03
$VLP: Wall Street analysts bullish on VLP's earnings growth: http://t.co/iIUsSwYtH1 http://t.co/zTm51Xrq7s
4 Oct 15 09:37:02
$VLP is rated BUY, 27.4% upside by Wall Street analysts based on average ratings/targets http://t.co/rINA2bxkCT http://t.co/lDGNiP1wla
2 Oct 15 04:57:04
$VLP: Can Valero Energy (VLP) Keep the Earnings Streak Alive This …: http://t.co/ewYmGAf28y
1 Oct 15 09:15:06
$VLP: New SEC Filing for VLP: Form 8-K (No. 0001583103-15-000031): http://t.co/9Fq0I7zbR1
SEC Filings Reporter
1 Oct 15 09:14:07
NEW SEC Filing for $VLP filed a moment ago: http://t.co/vgoMPo91CY http://t.co/5Mki8yHPyV
Sleek Money
30 Sep 15 18:35:10
Valero Energy Partners Shares Up 4.7% $VLP http://t.co/26JqMSgFxu
30 Sep 15 18:29:03
$VLP: Valero Energy Partners Shares Up 4.7% (VLP): http://t.co/v1b6Yw2mbp
The Daily Dividend
30 Sep 15 16:59:07
$VLP is one of biggest winner #stocks today. read more: http://t.co/f3OBjmH5wk
30 Sep 15 15:12:41
Analyst Actions
30 Sep 15 13:43:02
$VLP: Bullish analyst action by SunTrust Robinson Humphrey on Valero Energy Partners: http://t.co/vNhtboXiQ1 http://t.co/HbVL0dqK5q
30 Sep 15 08:30:06
Valero Energy Partners PT Lowered to $57.00 at Barclays $VLP http://t.co/veKiThm7XQ
Alexander Morris
30 Sep 15 07:41:04
$VLP: 1mRunaway+:1 [+4%,.4%offHi], PrvCLo, FltBO-, AtgPivH4, 2:1Accel+, tf:0001111, FirmTrnd--:0%; TrdVol:2x:2x; TLM:2.3; ILM:0.6
The Legacy News
30 Sep 15 05:31:11
Valero Energy Partners Stock Rating Upgraded by SunTrust $VLP http://t.co/XhUvMm5PxC
29 Sep 15 07:43:54
Valero Energy Partners Upgraded at SunTrust $VLP http://t.co/3haOC1Mf8I
Dakota Financial
29 Sep 15 07:40:11
Valero Energy Partners Price Target Cut to $57.00 $VLP http://t.co/wHd6FQXzIj
28 Sep 15 10:09:55
Yesterday We Made $54,000 In Just One Trade More Info Here http://t.co/8WvnrVmkBS .. $VLO $VLP $VLRS
28 Sep 15 08:39:25
Valero Energy Partners Rating Increased to Buy at SunTrust $VLP http://t.co/dOtrHSdZIT
Dakota Financial
28 Sep 15 06:40:21
Valero Energy Partners Price Target Lowered to $57.00 at Barclays $VLP http://t.co/oFRicYOgPR
Sleek Money
28 Sep 15 06:36:31
Valero Energy Partners Price Target Lowered to $57.00 at Barclays $VLP http://t.co/y9fxQ9YdCl
27 Sep 15 17:24:33
MLP Weekly: Excessive Fear » MLPData http://t.co/zy5SExpull $SMLP $VLP $VLO $PAA $KYN
Breaking News
27 Sep 15 15:58:02
$VLP: Company Shares of Valero Energy Partners LP (NYSE:VLP) Drops …: http://t.co/OLwExU4Fc5
By  +Follow December 10, 2013 5:05PM



blog comments powered by Disqus

 Today's Must Reads

Market Got You Down?: Here Are Six Hot Stocks

Global Winners and Losers in the Oil Shakeout

This Bull Market is No Stranger to Big Fourth-Quarter Comebacks

When to Sell and When to Rent an Investment Property

Saving the Small-Cap Market


Small-cap stocks offer investors many benefits, ranging from higher growth potential to overlooked value opportuni... in Equities.com's Hangs on LockerDome

About us

Equities.com is an advanced financial data portal and social network designed to connect self-directed investors with the world’s most innovative startup and small cap companies. Through our in-depth coverage of small cap markets, comprehensive research and stock valuation reports, state of the art issuer products, and world class events, Equities.com provides the social tools and insight that drive tomorrow’s investment relationships and opportunities.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.

Login or Register