Sunoco (SUN) to Acquire Emerge Energy Services' (EMES) Fuels Business in $179M Deal

Emerge Energy Services (NYSE: EMES) announce that it has entered into a definitive agreement for the sale of Emerge's fuels business (the "Fuels Business") to Sunoco LP ("Sunoco") (NYSE:SUN), a publicly traded master limited partnership engaged in the wholesale distribution and retail sale of motor fuels. The Fuels Business is comprised of Dallas-based Direct Fuels LLC and Birmingham-based Allied Energy Company LLC, both wholly owned subsidiaries of Emerge, and engages primarily in the processing of transmix and the distribution of refined fuels.

The aggregate purchase price is $178.5 million, subject to working capital adjustments, and the transaction will be completed on a cash-free, debt-free basis. As stated previously, Emerge intends to apply the proceeds, net of transaction related expenses, to reduce its outstanding debt.

Following the sale, Emerge will become a pure-play business with all of its assets and operations focused on its Sand segment, which is engaged in the businesses of mining, processing and distributing silica sand, a key input for the hydraulic fracturing of oil and natural gas wells.

Ted W. Beneski, Chairman of the Board of Emerge, commented, "This agreement with Sunoco is the result of a thorough process undertaken to maximize value for unitholders. We are pleased with the results of this process and could not be happier to be partnering on this transaction with Sunoco, a top operator with a stellar reputation in the marketplace. The Fuels Business will be in good hands."

With respect to Emerge's use of proceeds, Mr. Beneski continued, "As we have stated on previousearnings calls, we undertook the sale of the Fuels Business to generate proceeds to pay down Emerge's debt. I am encouraged to say that the cash proceeds from this transaction will allow Emerge to substantially reduce its overall debt levels, and will better position the company to opportunistically execute on strategic initiatives and create long term value as the industry looks to exit the current prolonged downturn."

The divestiture of the Fuels Business is subject to regulatory approval and customary closing conditions and is expected to be completed during the third quarter of 2016. J.P. Morgan Securities LLC is acting as exclusive financial advisor to Emerge, and Latham & Watkins LLP is acting as legal counsel.