Seven Stores for 7-Eleven
Industry giant continues trend of infrequent acquisitions with small-scale purchase
GLOUCESTER, Va. -- 7-Eleven flexed its often-dormant acquisition arm this month with the purchase of seven Little Sue convenience stores in Gloucester and Middlesex counties of Virginia, as reported in a CSP Daily News Flash yesterday. The Dallas-based company is expected to purchase an eighth store from the small chain in coming weeks, as well, according to sources.
“We purchased seven Little Sue units, plan to rebrand them as 7-Eleven stores over the next several months, and will then franchise them as part of our strategy for that area,” 7-Eleven spokesperson Margaret Chabris [image-nocss] told CSP Daily News late yesterday.
The purchase is the first of note by 7-Eleven in more than a year, and one of only a few since 7-Eleven officials made it known they intend to grow to about 8,000 units by 2010.
Back in 2006, shortly after 7-Eleven purchased the White Hen Pantry c-store chain in Chicago and Boston, company officials said more growth was on the way, most likely in urban markets such as Boston, Los Angeles, New York and Philadelphia. “[We 're] really bullish on growth opportunities, particularly in areas we 're concentrated in,” said CEO Joseph DePinto in late August 2006. “We will spend a significant amount of time assessing [opportunities] in those parts of the country.”
In December 2006, 7-Eleven purchased 10 stores in the Salt Lake City market, at which time DePinto told Bloomberg that 7-Eleven intended to raise its store count to about 8,000 by 2010. He also predicted that 7-Eleven would eventually have as many as 30,000 stores in the United States and Canada. “We see us doing more acquisitions in the short to medium term,” DePinto said.
The Little Sue stores were purchased from Neighborhood Convenience Inc., a Gloucester, Va.-based convenience-store chain owned by John Steele.
Founded in 1972, Little Sue has built significant customer recognition and loyalty in its market, according to Matrix Capital Markets Group Inc., which managed the transaction. Steele has owned the chain since 1996, and last summer, he engaged Matrix to structure and manage a confidential sale process to maximize shareholder value, according to a press release.
7-Elevenclosed on the transaction on January 18. Steele opted to retain ownership of one of the stores to continue operating a business, according to Cedric Fortemps, vice president with Richmond, Va.-based Matrix.
Tom Kelso, managing director and head of the Energy & Multi-Site Retail Group at Matrix managed the transaction and added, “It was a pleasure working with John to advise him on maximizing the value of the business he has successfully owned and operated for more than a decade.”
Fortemps, who co-managed the transaction, commented, “The strength of the Little Sue brand, the chain 's customer loyalty, and its exceptional management and store personnel made the business a very attractive opportunity for a buyer and were all key factors in the amount of competition that resulted for the assets.”
Matrix 's Energy & Multi-Site Retail Team provides transactional advisory services to companies in the energy and multi-site retail sectors.