HollyFrontier Corp. and Holly Energy Partners LP will acquire a HollyFrontier subsidiary that owns certain Woods Cross refinery units for about $275 million in a dropdown, the companies said Sept. 19.

Holly Energy will acquire assets including the newly constructed crude, fluid catalytic cracking and polymerization units at HollyFrontier's Woods Cross refinery.

The Woods Cross Refinery units were constructed as part of the Woods Cross expansion.

The total transaction consideration represents an implied multiple of 8.5x the 2017 expected EBITDA. The transaction is expected to close by Oct. 1.

In connection with the closing of the proposed transaction, HollyFrontier and Holly Energy expect to enter into 15-year tolling agreements for each respective unit containing minimum quarterly throughput commitments from HollyFrontier.

Holly Energy also agreed to a private placement with certain clients of Tortoise Capital Advisors LLC for about $100 million of common equity.

The balance of the purchase price will be financed by borrowings under Holly Energy Partner’s existing revolving credit agreement.

HollyFrontier Corp. is based in Dallas.