Insider's View: The Top M&A Deals of 2013 (Part 2 of 3)

Hess & Sunoco make headlines; 7-Eleven, Couche-Tard relatively quiet

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

Top Convenience Store Merger & Acquisition News: Hess, Sunoco, 7-Eleven, Couche-Tard

Western Refining Inc.

Western Refining Inc., an independent refining and marketing company based in El Paso, Texas, entered into an agreement to acquire the ownership interests of ACON Investments and Texas Pacific Group (TPG) in Northern Tier Energy LP for a total consideration of $775 million. Northern Tier Energy’s assets consist of the St. Paul Park Refinery in St. Paul Park, Minn.; other midstream assets; and the SuperAmerica retail assets of the company, consisting of 163 company-operated c-stores and 74 franchised stores located primarily in Minnesota and Wisconsin. Northern Tier Energy had previously completed an IPO as an MLP in July 2012. As a result of this transaction, Western Refining’s operating platform will include refining capacity of 242,500 barrels per day; wholesale distribution of approximately 100,000 barrels per day to customers in the Southwest, Mid-Atlantic and Upper Midwest regions; an integrated network of 458 retail c-stores; and extensive crude oil and refined product logistics assets.

MLP Momentum Continues

Coming on the heels of a number of initial public offerings (IPOs) in 2012 involving MLPs, several other industry players either commenced the IPO filing process or began an analysis of the merits of using the MLP structure during 2013. Western Refining Logistics LP, a subsidiary of Western Refining Inc., completed its IPO in October. The new company trades on the New York Stock Exchange (NYSE) under the symbol WNRL. Phillips 66 Partners LP, a subsidiary of Phillips 66, launched an IPO as well. The new entity, which trades on the NYSE under the symbol PSXP, will own, operate, develop and acquire primarily fee-based crude oil, refined petroleum product and natural gas liquids pipelines and terminals, and other transportation and midstream assets.

7-Eleven Inc.

Although 2013 didn’t prove to be the banner acquisition year for 7-Eleven that 2012 was, the company continued its aggressive growth and acquisition strategies during the year. Early last year, 7-Eleven agreed to lease 19 stores in the Cleveland area from Lehigh Gas Partners LP. This transaction added to the other locations in the Cleveland market that it had acquired previously from EZ Energy Ltd. and Handee Marts Inc. The company also announced that it has opened 12 stores in northeast Florida and plans to have 80 locations in the area by 2015. 7-Eleven also closed on the acquisition of 46 locations from CB Mart Inc. in South Carolina. With that acquisition, the company increased its store count in the Carolinas to more than 100; it follows the previous acquisition of 55 Sam’s Mart and 13 Fast Track stores.

During 2013, 7-Eleven announced the sale of 145 sites in six states by sealed-bid sale through NRC Realty & Capital Advisors LLC. In announcing the sale, the company said that the stores did not fit its present business model and strategy. The company also reported that it has added 38 stores across a five-county region in southwest Florida since 2011 and plans to add 40 more locations within the next five years.

Alimentation Couche-Tard/Circle K

Alimentation Couche-Tard Inc., through its subsidiary Mac’s Convenience Stores LLC, completed the acquisition of the assets of Dickerson Petroleum Inc., which consist of 29 company-operated retail locations operating as Gas Mart, as well as 29 wholesale assets. Circle K Stores Inc. entered into an agreement with Albuquerque Convenience & Retail LLC, a wholly owned subsidiary of Phillips 66 Cos., to acquire 23 c-stores in New Mexico. Circle K also closed on the acquisition of 13 c-stores in Florida and Georgia from Publix Super Markets Inc. As a result of these transactions, Couche-Tard’s network in the Southwest division includes 271 company-operated stores and six locations under wholesale or franchise agreements, 414 company-operated stores in the Florida division and 279 stores in the Southeast division.

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