By Dhirendra Tripathi
Investing – Vertex Energy (NASDAQ:VTNR) shares soared 125% in Thursday’s premarket as the specialty refiner sealed a $75 million deal to a refinery in Alabama from Royal Dutch Shell (NYSE:RDSa).
Vertex (NASDAQ:VRTX) expects the acquisition to add $3 billion in annual revenue and more than $400 million in gross profit by end-2023.
The Mobile, Alabama, operation refines 90,000 barrels a day. Vertex plans to produce petroleum fuel and renewable diesel at the refinery following the close of the transaction, expected by December.
The Houston, Texas-based company will acquire approximately 3.2 million barrels of product storage, inventory, logistics and distribution assets, together with more than 860 acres of developed and undeveloped land.
The inventory is currently valued between $65 million and $85 million, according to Reuters.
Vertex expects to retain the approximately 200 employees currently engaged in the business being acquired.
Shell and Vertex will have crude supply and product offtake agreements, the companies said.
Vertex plans to produce approximately 10,000 bpd of renewable diesel and renewable byproducts at the plant by the end of 2022, increasing to 14,000 bpd by 2023, Reuters reported.
The company said it will spend $85 million to convert Mobile's hydrocracking unit.