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Based in Brentwood, TN, Delek Logistics Partners, LP (NYSE:DKL) scheduled a $160 million IPO with a market capitalization of $490 at a price range mid-point of $20, for Friday, November 2, 2012.

Before Sandy, seven IPOs were scheduled for the week of October 29th. Three have been pushed back to next week. The full IPO calendar is available here.

S-1 filed October 25, 2012.

Manager, Joint Managers: BofA Merrill Lynch/ Barclays/ Goldman, Sachs/ Wells Fargo Securities.
Co Managers: Deutsche Bank Securities/ Raymond James/ Simmons.

SUMMARY
DKL is a mid-stream oil pipeline company primarily serving its parent Delek US Holdings (NYSE:DK), whose stock is up 107% YTD.

DKL expects to distribute at the minimum rate of 7.5% at the price range mid-point of $20. The general partners incentive distribution rights kick in at an 8.6% return, with increasing percentages up to 48%.

CONCLUSION
We believe DKL will increase from its IPO price because the payout rate is competitive and because DKLt has a parent/sponsor who has performed very well YTD.

PARENT/SPONSOR
Delek US Holdings, $1.39 billion market capitalization, P/E of 7, dividend yield of .65%, DK stock is up 107% YTD.

BUSINESS
DKL is a growth-oriented Delaware limited partnership recently formed by Delek to own, operate, acquire and construct crude oil and refined products logistics and marketing assets.

A substantial majority of DKL's existing assets are integral to the success of Delek's refining and marketing operations.

DKL gathers, transports and stores crude oil and market, distribute, transport and store refined products in select regions of the southeastern United States and west Texas for Delek and third parties, primarily in support of the Tyler and El Dorado refineries.

TWO SEGMENTS
Pipelines and Transportation.
DKL's Pipelines and Transportation segment consists of approximately 400 miles of crude oil transportation pipelines, 16 miles of refined product pipelines, an approximately 600-mile crude oil gathering system and associated crude oil storage tanks with an aggregate of approximately 1.4 million barrels of active shell capacity.

Wholesale Marketing and Terminalling.
In DKL's Wholesale Marketing and Terminalling segment, DKL provides marketing services for 100% of the refined products output of the Tyler refinery, other than jet fuel and petroleum coke, and DKL owns and operates five light product terminals.

CASH DISTRIBUTION
Expected minimum distribution of $1.50 per year, which is 7.5% at the price range mid-point of $20.

CASH DISTRIBUTION POLICIES
First, 98.0% to the holders of common units and 2.0% to the general partner, until each common unit has received the minimum quarterly distribution of $0.375 plus any arrearages from prior quarters;

Second, 98.0% to the holders of subordinated units and 2.0% to the general partner, until each subordinated unit has received the minimum quarterly distribution of $0.375; and

Third, 98.0% to all unitholders, pro rata, and 2.0% to the general partner, until each unit has received a distribution of $0.43125.

Incentive distribution
If cash distributions to unitholders exceed $0.43125 per unit in any quarter, the general partner will receive, in addition to distributions on its 2.0% general partner interest, increasing percentages, up to 48.0%.

FORMATION
DKL was formed in April 2012 by Delek US Holdings, Inc. and its wholly owned subsidiary, Delek Logistics GP, LLC, to own, operate, acquire and construct crude oil and refined products logistics and marketing assets. In connection with the closing of this offering, Delek will contribute all of DKL's predecessor's assets and operations to DKL (excluding working capital and other noncurrent liabilities).

At or prior to the closing of this offering the following will occur:

Delek will contribute all of DKL's initial assets and operations, including certain subsidiaries

DKL will issue 3,999,258 common units and 11,999,258 subordinated units, representing an aggregate 65.3% limited partner interest in us, to Delek;

DKL will issue 489,766 general partner units, representing a 2.0% general partner interest in DLK, and all of incentive distribution rights to DKL's general partner;

DKL will issue 8,000,000 common units to the public in this offering, representing a 32.7% limited partner interest in us, and will apply the net proceeds as described in "Use of Proceeds";

DKL will grant 2,500 phantom units with dividend equivalent rights to each of two independent directors and will grant up to 445,991 phantom units with dividend equivalent rights to certain key employees of affiliates.

DKL will enter into a new $175 million revolving credit facility, under which DKL will borrow $90 million to fund an additional cash distribution to Delek.

USE OF PROCEEDS
DKL expects to receive $145 million from this IPO. Proceeds are allocated as follows:

To fund a $57.8 million cash distribution to Delek;

To retire the $50.9 million of outstanding indebtedness under the predecessor's revolving credit facility;

To provide $35.0 million in working capital to replenish amounts distributed to Delek, in the form of trade and other accounts receivable, in connection with the closing of this IPO.

The balance for other general partnership purposes.

Source: IPO Preview: Delek Logistics Partners