ALLENTOWN, Pa. -- CrossAmerica Partners LP has completed the previously announced transaction with an unnamed institutional real-estate investor for the sale and leaseback of properties it acquired as part of the State Oil acquisition for net proceeds of approximately $25 million.
CrossAmerica acquired the State Oil assets on Sept. 27 for $41.8 million, which included a total of 56 fee properties and 60 million gallons of annual fuel supply.
In connection with the sale, CrossAmerica entered into a lease agreement with a 6.5% capitalization rate under which it will lease 17 properties in the Chicago market for an initial period of 15 years with an additional 15 years of renewal options. The proceeds from the transaction will be used to reduce debt under the partnership’s revolving credit agreement.
Earlier this month, CrossAmerica announced that it has amended certain key terms of its $550 million revolving credit facility effective Dec. 13.
The amended agreement provides the partnership with additional borrowing flexibility, including increased capacity to execute sale-leaseback transactions of future acquired real property, while also addressing the pending deal between CST Brands Inc. and Alimentation Couche-Tard Inc. CrossAmerica's general partner, CrossAmerica GP LLC, is a wholly owned subsidiary of CST Brands, one of the largest independent retailers of motor fuels and convenience-store merchandise in North America.
In its biggest deal ever, Laval, Quebec-based Couche-Tard Inc. announced in August that it is acquiring San Antonio-based CST Brands for $4.43 billion (U.S.) or approximately $4.28 billion excluding the value of CST Brands’ equity participation in CrossAmerica.
“These amendments will provide CrossAmerica additional flexibility to fund acquisitions with our revolving line of credit and through sale-leaseback transactions similar to the recently announced sale-leaseback of properties acquired through the State Oil acquisition,” said Jeremy Bergeron, president of CrossAmerica. “We continue to focus on disciplined growth and are committed to maintaining a strong balance sheet.”
Allentown, Pa.-based CrossAmerica is a wholesale distributor of motor fuels and owner and lessor of real estate used in the retail distribution of motor fuels. Formed in 2012, CrossAmerica is a distributor of branded and unbranded petroleum for motor vehicles in the United States and distributes fuel to approximately 1,190 locations and owns or leases more than 880 sites. With a geographic footprint covering 29 states, the partnership has well-established relationships with several major oil brands, including Exxon, Mobil, BP, Shell, Chevron, Sunoco, Valero, Gulf, CITGO, Marathon and Phillips 66.
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