Sam L. Susser on Sale: A Great Starting Point
Deal represents a new beginning, not ending, for growth
CORPUS CHRISTI, Texas -- Presumably, this isn’t the first time someone has reached out to Sam L. Susser and proposed acquisition.
Certainly, his company with deep roots in Texas, innovative leadership and ahead-of-the-curve food offerings has been at the top of many the investor’s list. But what made him say yes this time? What is it about Energy Transfer Partners (ETP) and its mission that even allowed him to entertain the notion?
Simply put, they share a common goal: Growth.
“This opportunity was compelling because of shared values between our two organizations,” Susser, the chairman and CEO of Susser Holdings Inc., said in a conference call Monday, the same day it was announced ETP was buying Susser Holdings for $1.8 billion.
A Brief History
Sam L. Susser grew up in the convenience store industry. His grandfather Sam and his grandmother Minna began operating a pair of car service stations in 1938. In the 1960s, his father Sam and Uncle Jerry Susser took over the business, eventually creating Susser Holdings. Susser himself took over in 1988 after a stint from 1985-1987 with Salomon Brothers Inc. in New York City and in Dallas in the corporate finance division and in the mergers and acquisitions group.
In the 1990s, the company began licensing convenience stores, eventually operating dozens of 7-Eleven and Circle K locations in Texas and Oklahoma. In 2006, Susser rebranded all the sites as Stripes Convenience Stores. Today more than 60% of Stripes stores are home to the Susser QSR concept, Laredo Taco.
In 2012, Susser spun off the wholesale fuels business to a master limited partnership (MLP) called Susser Petroleum Partners LP. It is today one of the leading independent motor fuels distributors in Texas. And Stripes is the 17th-largest convenience store chain in the United States.
Still, Susser finds his best opportunity to grow the company through new ownership.
“This [deal] created an opportunity to continue on our pathway to growth and investment in our core markets and leverage our brands hopefully across the country and to really build the business,” he said.
True to that word, ETP is already making plans to take advantage of Susser’s sizable “land bank” of fully owned or optioned properties for development. According to Bob Owens, president and CEO at Sunoco, there are approximately 50 sites that he would look at to build going forward following closing of the deal, which is expected in the third quarter of 2014.
As far as the brands themselves are concerned, both Susser’s Stripes and Laredo Taco should enjoy some growth, as well. While no one could give specifics during the conference call, there are certainly aspirations to expand: “We do see significant opportunity,” Owens said. “I will tell you that we will be very thoughtful on timing.
“The Stripes offering is very successful and our vision going forward is that we will do what makes sense in specific geographies.”
Susser Holdings is a publically held company. It has a responsibility to its shareholders to seriously consider every offer that comes across its table. ETP may have simply been the first to offer an acceptable price coupled with a strong intent to strengthen and grow the brand. In a Q&A memo to its employees, Susser explained that “in short, this is the right combination at the right time.”
“ETP is wired 100% to grow the business, as are we,” Susser said in the conference call. “We see it as a great starting point, not an end point, for our retail business and our newly combined retail business to grow from here.”
Going forward, focus appears to be unwavering. Susser asks all employees to continue working hard to support “the business (serving our customers well, striving to meet our goals), teamwork (working together to make the merger successful) and respect (for each other, ideas, processes, feelings and the potential we have together).”
To be sure, it was never an easy decision to make. Susser himself has called the move bittersweet: “The coming days will be very emotional for many of us, including each and every member of the Susser Family,” he said in a memo to Susser Holdings team members. The memo itself references a quote from Albert Einstein: “The only constant is change.”
“Together, we have built a great company with great brands, great assets and mainly, great people. This is a new chapter for our business and positions our team for an even brighter future in the years ahead,” he said.