8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

May 26, 2022

Date of Report (Date of earliest event reported)

DELEK LOGISTICS PARTNERS, LP

(Exact name of registrant as specified in its charter)

Delaware	001-35721		45-5379027
(State or other jurisdiction of incorporation)	(Commission File Number)		(IRS Employer Identification No.)
7102 Commerce Way	Brentwood	Tennessee	37027
(Address of Principal Executive)			(Zip Code)

(615) 771-6701

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Units Representing Limited Partner Interests	DKL	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Item 1.01 Entry into a Material Definitive Agreement.

Credit Agreement Amendments

On May 26, 2022, Delek Logistics Partners, LP (the “Partnership”) and substantially all of its subsidiaries (together with the Partnership, the “Borrowers”) entered into a Third Amendment (the “Third Amendment”) to its Third Amended and Restated Credit Agreement with Fifth Third Bank, National Association, as Administrative Agent (the “Administrative Agent”), and the Lenders party thereto, which modifies the Third Amended and Restated Credit Agreement, dated as of September 28, 2018 (as amended from time to time, the “Credit Agreement”), by and among the Borrowers, the Administrative Agent, the Lenders and the L/C Issuers from time to time party thereto. Among other things, the Third Amendment provides for certain changes to the Credit Agreement in connection with the Borrowers’ previously announced acquisition of the equity interests of 3 Bear Delaware Holding - NM, LLC in respect of pro forma calculations of EBITDA with respect to such acquisition.

Further, on May 26, 2022, the Borrowers entered into a Fourth Amendment (the “Fourth Amendment”) to the Credit Agreement. Among other things, the Fourth Amendment: (i) increases the U.S. Revolving Credit Commitments (as defined in the Credit Agreement) by an amount equal to $150,000,000, for an aggregate amount of $1,000,000,000, (ii) increases the U.S. L/C Sublimit (as defined in the Credit Agreement) to an aggregate amount equal to $90,000,000 and (iii) increases the U.S. Swing Line Sublimit (as defined in the Credit Agreement) to an aggregate amount equal to $18,000,000.

Item 2.01 Completion of Acquisition or Disposition of Assets.

As previously announced, on April 8, 2022, DKL Delaware Gathering, LLC (the “Purchaser”), a subsidiary of the Partnership, entered into a Membership Interest Purchase Agreement with 3 Bear Energy – New Mexico LLC (the “Seller”) to purchase 100% of the limited liability company interests in 3 Bear Delaware Holding – NM, LLC (the “Purchased Interests”), related to Seller’s crude oil and gas gathering, processing and transportation businesses, as well as water disposal and recycling operations, in the Delaware Basin in New Mexico (the “Purchase Agreement”).

The acquisition of the Purchased Interests contemplated by the Purchase Agreement closed on June 1, 2022. The total consideration for the acquisition of the Purchased Interests is $624.7 million, subject to customary closing adjustments. The acquisition was financed through a combination of cash on hand and borrowings under the Credit Agreement. The Purchase Agreement is attached to this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 above is incorporated herein by reference.

Item 7.01 Regulation FD Disclosure

On June 1, 2022, the Partnership issued a press release announcing the closing of the acquisition of the Purchased Interests. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.

The information in this Item 7.01 is being furnished, not filed, pursuant to Regulation FD. Accordingly, the information in Item 7.01 of this report will not be incorporated by reference into any registration statement filed by the Partnership under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated by reference. The furnishing of the information in this report is not intended to, and does not, constitute a determination or admission by the Partnership that the information in this report is material or complete, or that investors should consider this information before making an investment decision with respect to any security of the Partnership or any of its affiliates.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired.

The financial statements required by Item 9.01(a) of Form 8-K will be filed by amendment to this Current Report not later than 71 days after the date on which this Current Report is required to be filed.

(b) Pro Forma Financial Information.

The financial statements required by Item 9.01(b) of Form 8-K will be filed by amendment to this Current Report not later than 71 days after the date on which this Current Report is required to be filed.

(d)	Exhibits.
2.1	Membership Interest Purchase Agreement, dated as of April 8, 2022, by and between 3 Bear Energy – New Mexico LLC and DKL Delaware Gathering, LLC (incorporated by reference to Exhibit 2.1 to the Partnership’s Current Report on Form 8-K filed on April 11, 2022).
99.1	Press release issued June 1, 2022.
104	Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: June 1, 2022	DELEK LOGISTICS PARTNERS, LP
	By: Delek Logistics GP, LLC
	its general partner
	/s/ Reuven Spiegel
	Name: Reuven Spiegel
	Title: Executive Vice President and Chief Financial Officer<br><br>(Principal Financial Officer)

Document

Exhibit 99.1

Delek Logistics Partners, LP Announces Closing of Acquisition from 3Bear Energy

BRENTWOOD, Tenn. June 1, 2022 -- Delek Logistics Partners, LP (NYSE: DKL) announced today the closing of the previously announced acquisition of 3Bear Delaware Holding – NM, LLC (“3Bear”), an indirect subsidiary of 3Bear Energy, LLC. The 3Bear operations include crude oil and gas gathering, processing and transportation businesses, as well as water disposal and recycling operations in the Delaware Basin in New Mexico. Total cash consideration is $624.7 million (excluding customary closing adjustments) and the acquisition is expected to result in an investment multiple of approximately 6.25 times preliminary forecasted 2023 EBITDA. The transaction is being funded with cash and debt financing.

3Bear has built a premier crude, gas and water gathering, processing and disposal business in the Northern Delaware Basin. 3Bear’s assets are anchored by ~350,000 dedicated acres and long-term fixed fee contracts. The asset base includes approximately 485 miles of pipelines, 88 million cubic feet per day of cryogenic natural gas processing capacity, 120 MBbl of crude storage capacity and 200 MBbl/d of water disposal capacity. The acquired entity will be part of a newly formed, wholly-owned subsidiary of Delek Logistics Partners, LP named “DKL Delaware Gathering Company, LLC”.

Uzi Yemin, Chairman, President and Chief Executive Officer of Delek Logistics’ General Partner stated, “This acquisition substantially increases our third party revenue at DKL, per our stated goals, and allows DKL to become a more diversified and less sponsor dependent entity. Additionally, 3Bear expands our product mix to natural gas and water, which will prove useful to customers within our legacy Permian gathering business. The geographic diversification into the Delaware Basin provides a broader platform for future growth and includes some of the most prolific acreage in the Permian Basin. Finally, the outlook for strong free cash flow should allow us to rapidly reduce leverage while maintaining our 5% distribution growth target for 2022.”

Advisors

RBC Capital Markets is serving as financial advisor and Baker Botts is serving as legal advisor to Delek Logistics on the transaction.

Tudor, Pickering, Holt & Co. is serving as financial advisor and Vinson & Elkins is serving as legal advisor to 3Bear on the transaction.

About Delek Logistics Partners, LP

Delek Logistics Partners, LP is a midstream energy master limited partnership headquartered in Brentwood, Tennessee. Through its owned assets and joint ventures located primarily in and around the Permian Basin, the Delaware Basin and other select areas in the Gulf Coast region and giving effect to the 3Bear acquisition, Delek Logistics Partners, LP provides gathering, pipeline and other transportation services primarily for crude oil and natural gas customers, storage, wholesale marketing and terminalling services primarily for intermediate and refined product customers, and water disposal and recycling services. Delek US Holdings, Inc. (NYSE: DK) (“Delek US”) owns the general partner interest as well as a majority limited partner interest in Delek Logistics Partners, LP, and is also a significant customer.

Investor Relations Contacts:

Blake Fernandez, Senior Vice President of Investor Relations and Market Intelligence, 615-224-1312

Media/Public Affairs Contact:

Michael P. Ralsky, Vice President - Public Affairs & ESG, 615-435-1407

Safe Harbor Provisions Regarding Forward-Looking Statements

This press release contains forward-looking statements that are based upon current expectations and involve a number of risks and uncertainties. Statements concerning current estimates, expectations and projections about future results, performance, prospects, opportunities, plans, actions and events and other statements, concerns, or matters that are not historical facts are "forward-looking statements," as that term is defined under the federal securities laws. Investors are cautioned that important factors may affect these forward-looking statements, as described in Delek US's and Delek Logistics' filings with the SEC, including risks disclosed in their respective Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other filings and reports with the SEC.

Forward-looking statements should not be read as a guarantee of future performance or results and will not be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking information is based on information available at the time and/or management's good faith belief with respect to future events, and is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Neither Delek US nor Delek Logistics undertakes any obligation to update or revise any such forward-looking statements to reflect events or circumstances that occur, or which they become aware of, after the date hereof, except as required by applicable law or regulation.

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