ACON Investments and TPG Capital Sign Definitive Agreements to Purchase Marathon’s Minnesota Downstream Assets

Purchase of Refinery and Terminals, SuperAmerica Convenience Stores and Franchising Operations, SuperMom’s Bakery, Minnesota Pipeline Assets and Inventories Totals Approximately $900 million

WASHINGTON & FORT WORTH, Texas--()--ACON Investments and TPG Capital announced that they have signed definitive agreements with Marathon Oil Corporation’s (NYSE: MRO) wholly owned subsidiary Marathon Petroleum Company LP (MPC) to acquire the majority of Marathon’s Minnesota downstream assets. TPG Capital and ACON Investments will form a new company, Northern Tier Energy LLC (“Northern Tier Energy”), to operate the assets.

ACON Investments and TPG Capital will be acquiring the 74,000 barrel/day St. Paul Park refinery and an equity interest in the Minnesota Pipe Line, the pipeline which supplies the majority of the refinery’s crude oil. In addition, ACON and TPG will be acquiring a portfolio of retail convenience stores including 166 owned and leased SuperAmerica convenience stores (159 in Minnesota, 6 in Wisconsin and 1 in South Dakota), 67 franchised SuperAmerica convenience stores, contracts to supply refined products to an additional 90 convenience stores as well as ownership of the SuperMom’s bakery and commissary. ACON Investments and TPG will be equal partners in the investment.

The total sale value of the operating assets and associated inventories is approximately $900 million; the agreements also contain earnout and margin support components subject to certain conditions. Marathon and the investor group first announced that a letter of intent had been signed on May 19, 2010. The transaction is expected to close before year-end, subject to customary closing conditions. Marathon will provide transition services after closing to support the creation of the new enterprise.

Northern Tier Energy will operate the Minnesota assets as a stand-alone company. The senior Northern Tier management team has extensive refining industry experience with Mario E. Rodriguez serving as Northern Tier Energy’s Chief Executive Officer and Hank Kuchta serving as its Chief Operating Officer. Following the close of the transaction, Northern Tier Energy will seek to grow through continued investments in the Minnesota assets. In addition, Northern Tier Energy will look to acquire additional refining and marketing assets with similarly attractive characteristics.

“The assets we are acquiring are strategically well positioned to withstand the challenges of the global market and have been well maintained and invested in by Marathon,” said Jonathan Ginns, founder and managing partner, ACON Investments. “They have an excellent safety and environmental compliance record and have been consistently profitable, even through the recent recession. We believe that under Mario and Hank’s experienced leadership Northern Tier Energy will transition smoothly to operating as a fully independent company.”

“We are very pleased to add this investment to TPG’s growing portfolio of upstream and downstream energy investments,” said Michael MacDougall, partner, TPG Capital. “We look forward to working with our partners at ACON and the Northern Tier Energy management team to grow the business organically as the economy continues to recover and to use Northern Tier Energy as a platform for additional downstream acquisitions.”

“We are excited to launch Northern Tier Energy with this investment in an outstanding group of assets under the sponsorship of ACON and TPG. We are looking forward to working with the talented employees across the refinery, terminal, retail and SuperMom’s businesses and to operate with the highest commitment to safety, reliability and the environment,” said CEO Mario E. Rodriguez. “Our goal is to grow Northern Tier Energy profitably and to be a responsible corporate citizen in the communities in which we operate.”

ACON and TPG’s financial advisors were Goldman Sachs, J.P. Morgan and Bank of America Merrill Lynch. ACON and TPG’s legal advisors were Cleary Gottlieb Steen & Hamilton, Vinson & Elkins LLP, Stroock, Stroock and Lavan LLP, and Faegre and Benson.

About ACON Investments

ACON Investments is a Washington, D.C. based private equity firm with offices in Los Angeles, Houston, Madrid, Sao Paulo, and Mexico City. Founded in 1996, ACON manages private equity funds and special purpose investment partnerships with investments in the United States, Europe and Latin America. ACON has been a longtime energy investor, executing investments in upstream and midstream oil and gas as well as in energy infrastructure and energy services, including Mariner Energy, Chroma Oil and Gas, Milagro Oil and Gas, Signal International, Tropigas LLC, and SAE Towers.

About TPG Capital

TPG Capital is the global buyout group of TPG, a leading private investment firm founded in 1992, with more than $47 billion of assets under management and offices in San Francisco, Beijing, Fort Worth, Hong Kong, London, Luxembourg, Melbourne, Moscow, Mumbai, New York, Paris, Shanghai, Singapore and Tokyo. TPG Capital has extensive experience with global public and private investments executed through leveraged buyouts, recapitalizations, spinouts, growth investments, joint ventures and restructurings. TPG has significant experience in the energy sector with investments including Alinta Energy, Belden & Blake, Copano Energy, Denbury Resources, Energy Future Holdings (formerly TXU), Texas Genco, and Valerus Compression Services. TPG has also been an active investor in the retail sector with investments including American Tire Distributors, Burger King, Debenhams, J.Crew, Myer, Neiman Marcus and PETCO.

About Marathon

Marathon is an integrated international energy company engaged in exploration and production; oil sands mining; integrated gas; and refining, marketing and transportation operations. Marathon, which is based in Houston, has principal operations in the United States, Angola, Canada, Equatorial Guinea, Indonesia, Libya, Norway, Poland and the United Kingdom. Marathon is the fourth largest United States-based integrated oil company and the nation's fifth largest refiner.

Contacts

For ACON
Caroline Luz
Owen Blicksilver Public Relations, Inc.
203-656-2928
or
For TPG Capital
Lisa Baker
Owen Blicksilver Public Relations, Inc.
914-725-5949
or
For Marathon:
Angela Graves, Media Relations
419-421-2703
or
Howard Thill, Investor Relations
713-296-4140
or
Chris Phillips, Investor Relations
713-296-3213

Release Summary

ACON Investments and TPG Capital have signed definitive agreements to acquire the majority of Marathon’s Minnesota downstream assets.

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Contacts

For ACON
Caroline Luz
Owen Blicksilver Public Relations, Inc.
203-656-2928
or
For TPG Capital
Lisa Baker
Owen Blicksilver Public Relations, Inc.
914-725-5949
or
For Marathon:
Angela Graves, Media Relations
419-421-2703
or
Howard Thill, Investor Relations
713-296-4140
or
Chris Phillips, Investor Relations
713-296-3213