The agreement also calls for an additional payment towards working capital, including inventory and accounts receivable.
The Indianapolis-based company intends to finance the acquisition through a combination of cash on hand and borrowings under its senior secured revolving credit facility.
Calumet’s obligation to consummate the acquisition is not conditioned upon the receipt of financing.
Calumet vice chairman and CEO Bill Grube said the acquisition further develops the firm’s long-term strategy of diversifying its crude slate and geographic presence.
"We expect this acquisition to be immediately accretive to our distributable cash flow. We are pleased with this acquisition and continue to actively look for additional growth opportunities," Grube added.
Montana Refining owns and operates a refinery in Great Falls that produces gasoline, middle distillates and asphalt, besides having crude oil throughput capacity of about 9,800 barrels per day.
The company markets these commodities produced at the refinery primarily into local markets in Washington, Montana, Idaho, and Canadian province Alberta.
The transaction, which is expected to close in the fourth quarter, is subject to customary closing conditions and regulatory approval.
Evercore Partners and Latham & Watkins are acting as financial advisor and legal counsel respectively to Calumet for this transaction.
