INDIANAPOLIS, Nov. 9, 2023
/PRNewswire/ -- Calumet Specialty Products Partners, L.P. (NASDAQ:
CLMT) (the "Partnership," "Calumet," "we," "our" or "us"), today
announced the execution of an agreement to effectuate a corporate
transition (the "Corporate Transition") of Calumet Specialty
Products Partners, L.P. to a new Delaware corporation ("New Calumet").
On November 9, 2023, the
Partnership, Calumet GP, LLC, the general partner of the
Partnership (the "General Partner"), The Heritage Group and the
other owners of the General Partner entered into a Partnership
Restructuring Agreement to effectuate the Corporate Transition (the
"Restructuring Agreement"). The Board of Directors of the General
Partner (the "Board") has unanimously approved the terms of the
Restructuring Agreement. The Board approved the Restructuring
Agreement following the recommendation and special approval of the
Conflicts Committee of the Board.
Key Elements of Corporate Transition
Subject to the conditions and terms provided for in the
Restructuring Agreement, at the closing of the transaction:
- Each common unit representing a limited partnership interest in
the Partnership (NASDAQ: CLMT) will be converted into the right to
receive one share of New Calumet's common stock ("Common
Stock")
- All incentive distribution rights in the Partnership and the
2.0% General Partner interest in the Partnership will be converted
into the right to receive 5.5 million shares of Common Stock and
2.0 million warrants with a three-year term and an exercise price
of $20.00 per share, which shares and
warrants will be issued to the owners of the General Partner
- New Calumet will be governed by a board of directors of nine
directors, classified into three classes; The Heritage Group and
affiliates will have the right to nominate three directors so long
as they own at least 15% of the Common Stock, which reduces two
directors so long as they own at least 10% and less than 15% of the
Common Stock.
"We are excited to be entering this new phase in the Calumet
transformation," said Amy
Schumacher, CEO of The Heritage Group and majority owner of
the General Partner. "We have tremendous confidence in the
Calumet team and its growth vision, and this transaction should
significantly broaden the investor base which will help to unlock
the value inherent in Calumet's growth strategy."
Todd Borgmann, Calumet CEO,
added, "This transaction positions us to significantly increase
Calumet's investor base. We very much appreciate the constructive
dialogue that has taken place over the past few months between the
Conflicts Committee and our General Partner, which I believe has
resulted in a transaction that is extremely beneficial for all
parties. The General Partner and The Heritage Group have
always been extremely supportive of Calumet's vision, including the
Montana Renewables growth story, and we're excited about the
foundation this transaction creates as we enter this new
chapter."
Conditions to Closing and Tax Treatment
Completion of the Corporate Transition is subject to customary
conditions including the approval by the Partnership's unitholders
at a special meeting and the customary closing conditions of the
associated agreements having been satisfied or waived. The
associated merger is intended to be tax-free to unitholders subject
to potential recapture for some unitholders as a result of the
change in tax status from a partnership to a C-Corporation. The
Corporate Transition is expected to close within nine months.
Webcast Information
A conference call is scheduled for 9:00
a.m. ET on November 9, 2023 to discuss the financial
and operational results for the third quarter of 2023, as well as
provide an overview of the Corporate Transition. Investors,
analysts and members of the media interested in listening to the
live presentation are encouraged to join a webcast of the call with
accompanying presentation slides, available on the Partnership's
website at www.calumetspecialty.investorroom.com/events. Interested
parties may also participate in the call by dialing (844) 695-5524.
A replay of the conference call will be available a few hours after
the event on the investor relations section of the Partnership's
website, under the events and presentations section and will remain
available for at least 90 days.
About the Partnership
Calumet Specialty Products Partners, L.P. (NASDAQ: CLMT)
manufactures, formulates, and markets a diversified slate of
specialty branded products and renewable fuels to customers across
a broad range of consumer-facing and industrial markets. Calumet is
headquartered in Indianapolis,
Indiana and operates twelve facilities throughout
North America.
Additional Information and Where to Find It
This communication relates to the proposed corporate
reorganization between the Partnership and New Calumet (the
"Transaction"). This communication may be deemed to be solicitation
material in respect of the proposed Transaction. The proposed
Transaction will be submitted to the Partnership's unitholders for
their consideration. In connection with the proposed Transaction,
New Calumet is expected to file with the SEC a registration
statement on Form S-4 (the "Form S‑4") containing a proxy
statement/prospectus (the "Proxy Statement/Prospectus") to be
distributed to the Partnership's unitholders in connection with the
Partnership's solicitation of proxies for the vote of the
Partnership's unitholders in connection with the proposed
Transaction and other matters as described in such Proxy
Statement/Prospectus. The Proxy Statement/Prospectus will also
serve as the prospectus relating to the offer of the securities to
be issued to the Partnership's equityholders in connection with the
completion of the proposed Transaction. The Partnership and New
Calumet may file other relevant documents with the SEC regarding
the proposed Transaction. The definitive Proxy Statement/Prospectus
will be mailed to the Partnership's unitholders when available.
BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE
PROPOSED TRANSACTION, INVESTORS AND UNITHOLDERS AND OTHER
INTERESTED PERSONS ARE URGED TO READ THE DEFINITIVE PROXY
STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION (INCLUDING
ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND OTHER RELEVANT MATERIALS
CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION.
The Proxy Statement/Prospectus, any amendments or supplements
thereto and other relevant materials, and any other documents filed
by the Partnership or New Calumet with the SEC, may be obtained
once such documents are filed with the SEC free of charge at the
SEC's website at www.sec.gov or free of charge from the
Partnership at www.calumet.com or by directing a written
request to the Partnership at 2780 Waterfront Parkway East Drive,
Indianapolis, Indiana 46214.
No Offer or Solicitation
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities, or a solicitation
of any vote or approval, nor shall there be any sale of securities
in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
Participants in the Solicitation
The Partnership, the General Partner and certain of the General
Partner's executive officers, directors, other members of
management and employees may, under the rules of the SEC, be deemed
to be "participants" in the solicitation of proxies in connection
with the proposed Transaction. Information regarding the General
Partner's directors and executive officers is available in the
Partnership's Annual Report on Form 10-K for the year ended
December 31, 2022, which was filed
with the SEC on March 15, 2023 (the
"Annual Report"). To the extent that holdings of the Partnership's
securities have changed from the amounts reported in the Annual
Report, such changes have been or will be reflected on Statements
of Changes in Beneficial Ownership on Form 4 filed with the SEC.
These documents may be obtained free of charge from the sources
indicated above. Information regarding the participants in the
proxy solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in
the Form S-4, the Proxy Statement/Prospectus and other relevant
materials relating to the proposed Transaction to be filed with the
SEC when they become available. Unitholders and other investors
should read the Proxy Statement/Prospectus carefully when it
becomes available before making any voting or investment
decisions.
Cautionary Statement Regarding Forward-Looking
Statements
Certain statements and information in this press release may
constitute "forward-looking statements." The words "will," "may,"
"intend," "believe," "expect," "outlook," "forecast," "anticipate,"
"estimate," "continue," "plan," "should," "could," "would," or
other similar expressions are intended to identify forward-looking
statements, which are generally not historical in nature. The
statements discussed in this press release that are not purely
historical data are forward-looking statements, including, but not
limited to, the statements regarding (i) the expected benefits of
the Corporate Transition to the Partnership and its unitholders,
(ii) the anticipated completion of the Corporate Transition and the
timing thereof, (iii) the expected future growth of the reorganized
company and (iv) the plans and objectives of management for future
operations. These forward-looking statements are based on our
current expectations and beliefs concerning future developments and
their potential effect on us. While management believes that these
forward-looking statements are reasonable as and when made, there
can be no assurance that future developments affecting us will be
those that we anticipate. Our forward-looking statements involve
significant risks and uncertainties (some of which are beyond our
control) and assumptions that could cause our actual results to
differ materially from our historical experience and our present
expectations or projections. Known material factors that could
cause actual results to differ materially from those in the
forward-looking statements include: the overall demand for
specialty products, fuels, renewable fuels and other refined
products; the level of foreign and domestic production of crude oil
and refined products; our ability to produce specialty products,
fuel products, and renewable fuel products that meet our customers'
unique and precise specifications; the marketing of alternative and
competing products; the impact of fluctuations and rapid increases
or decreases in crude oil and crack spread prices, including the
resulting impact on our liquidity; the results of our hedging and
other risk management activities; our ability to comply with
financial covenants contained in our debt instruments; the
availability of, and our ability to consummate, acquisition or
combination opportunities and the impact of any completed
acquisitions; labor relations; our access to capital to fund
expansions, acquisitions and our working capital needs and our
ability to obtain debt or equity financing on satisfactory terms;
successful integration and future performance of acquired assets,
businesses or third-party product supply and processing
relationships; our ability to timely and effectively integrate the
operations of acquired businesses or assets, particularly those in
new geographic areas or in new lines of business; environmental
liabilities or events that are not covered by an indemnity,
insurance or existing reserves; maintenance of our credit ratings
and ability to receive open credit lines from our suppliers; demand
for various grades of crude oil and resulting changes in pricing
conditions; fluctuations in refinery capacity; our ability to
access sufficient crude oil supply through long-term or
month-to-month evergreen contracts and on the spot market; the
effects of competition; continued creditworthiness of, and
performance by, counterparties; the impact of current and future
laws, rulings and governmental regulations, including guidance
related to the Dodd-Frank Wall Street Reform and Consumer
Protection Act; the costs of complying with the Renewable Fuel
Standard, including the prices paid for renewable identification
numbers ("RINs"); shortages or cost increases of power supplies,
natural gas, materials or labor; hurricane or other weather
interference with business operations; our ability to access the
debt and equity markets; accidents or other unscheduled shutdowns;
and general economic, market, business or political conditions,
including inflationary pressures, instability in financial
institutions, the prospect of a shutdown of the U.S. federal
government, general economic slowdown or a recession, political
tensions, conflicts and war (such as the ongoing conflicts in
Ukraine and the Middle East and their regional and global
ramifications).
For additional information regarding factors that could cause
our actual results to differ from our projected results, please see
our filings with the Securities and Exchange Commission ("SEC"),
including the risk factors and other cautionary statements in our
latest Annual Report on Form 10-K and other filings with the
SEC.
We caution that these statements are not guarantees of future
performance and you should not rely unduly on them, as they involve
risks, uncertainties, and assumptions that we cannot predict. In
addition, we have based many of these forward-looking statements on
assumptions about future events that may prove to be inaccurate.
While our management considers these assumptions to be reasonable,
they are inherently subject to significant business, economic,
competitive, regulatory and other risks, contingencies and
uncertainties, most of which are difficult to predict and many of
which are beyond our control. Accordingly, our actual results may
differ materially from the future performance that we have
expressed or forecast in our forward-looking statements. Readers
are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date they are made. We
undertake no obligation to publicly update or revise any
forward-looking statements after the date they are made, whether as
a result of new information, future events or otherwise, except to
the extent required by applicable law. Certain public statements
made by us and our representatives on the date hereof may also
contain forward-looking statements, which are qualified in their
entirety by the cautionary statements contained above.
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SOURCE Calumet Specialty Products Partners, L.P.