Westlake Chemical Acquires Additional 5 pc Stake in OpCo

Westlake Chemical Partners LP (WLKP) has agreed to acquire an additional 5 percent interest in Westlake Chemical OpCo LP (OpCo) for approximately $229.2 million.

This transaction will increase the Westlake’s limited partner interest in OpCo from approximately 13.3 percent to approximately 18.3 percent and will represent the second purchase of additional interests in OpCo by Westlake since its initial public offering.

OpCo’s assets are comprised of three ethylene production facilities, which primarily convert ethane into ethylene and have an aggregate annual capacity of approximately 3.7 billion pounds and a 200-mile ethylene pipeline.

OpCo sells approximately 95 percent of its ethylene production to Westlake Chemical Corporation under a long-term supply agreement, which provides for a stable $0.10 margin per pound.

“The acquisition of this additional interest in OpCo, which provides a high-quality, stable, fee-based earnings stream, represents just one of a number of levers we can use to grow our distributions over time. In addition to purchasing increased interests in OpCo, the partnership can pursue organic growth opportunities such as capacity expansions in OpCo’s ethylene production facilities and acquisitions of other qualified assets from third parties,” said Albert Chao, president and chief executive officer, Westlake Chemical Partners LP.

This committee was advised by Jefferies LLC as to financial matters and Akin Gump Strauss Hauer & Feld LLP as to legal matters. Westlake Chemical Corporation’s legal counsel was Vinson & Elkins LLP.