Valero Energy completes sale of refinery to Alon

Valero received $333 million plus $143 million as part of an initial payment toward working capital. Valero also received an earn-out provision, which the company has hedged to lock in a value of about $200 million.

Dallas-based Alon said the acquisition will boost its crude refining capacity by 50 percent to 250,000 barrels per day. Financing for the transaction included a $302 million term loan arranged by Credit Suisse, which also served as Alon's adviser in the transaction. Additionally, Bank of America has arranged a $400 million revolver facility for ongoing working capital needs.

Alon Israel, the company's majority stockholder, also provided an equity investment of $80 million in preferred stock, which may be exchanged for shares of Alon common stock after three years.