Insider's View: M&A Market Just Beginning to Pick Up

Two blockbuster acquisitions lead capital-markets review of Q2 2014

Dennis L. Ruben, Executive Managing Director, NRC Realty & Capital Advisors LLC

business deal handshake

Energy Transfer Partners LP/Susser Holdings

To the surprise of everyone in the convenience store industry, Energy Transfer Partners LP. Parent company of Sunoco, announced the purchase of Susser Holdings Corp. and its 630-store chain based in Corpus Christi, Texas, for a total consideration of $1.8 billion. Following the initial purchase of Susser Holdings, a series of drop-down transactions will occur whereby existing ETP and Susser Holdings retail business units will be sold to Susser Petroleum Partners LP. The company stated that this process will yield a centralized retail business combining both ETP’s Sunoco fuel brand and Susser’s Stripes convenience stores.

Shortly after the announcement of the Susser acquisition, ETP followed up with the disclosure that it had acquired 40 Tigermarket convenience stores from Tiger Management.  The stores were acquired through Sunoco subsidiary Southside Oil Co., which ETP acquired through its acquisition of Mid-Atlantic Convenience Stores in October of 2013.  Most Tigermarket stores are located in and around Nashville, Tenn.

Speedway LLC/Hess Corp.

Although it had been generally believed that Hess Corp. intended to spin off its retail assets to its shareholders based upon its public filings in January, Hess surprised the industry by announcing in May that it had entered into an agreement to sell the entire retail network to Marathon Petroleum Corp.’s Speedway LLC subsidiary for $2.87 billion. The transaction is anticipated to close at the end of the third quarter of this year. After the closing, Speedway will have 2,733 company-owned stores. This will make Speedway the largest company-owned and -operated convenience-store chain in the country based on revenue and the second-largest based on store count.

CST Brands Inc.

CST Brands Inc. announced that it was selling 100 gas stations and convenience stores in nine states, as well as 16 former gas stations and one parcel of land.  Most of the stores are located in Texas, Colorado, Arizona and California. Approximately half of the Texas sites are in the Dallas-Fort Worth area. In announcing the sale, the company indicated that it wanted to streamline its operations to focus on its core business strategy of building larger-format stores that can offer a wider array of enhanced product offerings. CST Brands engaged NRC Realty & Capital Advisors LLC to coordinate the sale of these locations.

7-Eleven Inc.

7-Eleven Inc. announced that it was selling 75 gas stations and convenience stores in 16 states that did not fit the company’s current business model. Most of the stores are located in Florida, Virginia, Massachusetts and Illinois. Of the 75 locations, 22 are convenience stores with gasoline, while 53 do not sell fuel. 7-Eleven once again retained NRC Realty & Capital Advisors LLC to handle the sale.

CONTINUED: Other Notable Transactions

Part of CSP's 2014 Convenience Top 101 retailers
By Dennis L. Ruben, Executive Managing Director, NRC Realty & Capital Advisors LLC
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