Sunoco LP Completes Acquisition of Susser Holdings

Scale will bring new organic growth opportunities, enhance acquisition opportunities

Sunoco Susser Stripes Laredo Taco Aloha APlus

HOUSTON -- Sunoco LP has announced that it has completed the acquisition of Susser Holdings Corp. from ETP Holdco Corp. and Heritage Holdings, Inc., wholly owned subsidiaries of Energy Transfer Partners LP (ETP). The companies value the transaction at approximately $1.93 billion.

Sunoco LP paid $966.9 million in cash and issued ETP's subsidiaries approximately 21.98 million Sunoco LP units, which the companies value at approximately $966.9 million. In addition, there will be an exchange for 11 million Sunoco LP units owned by Susser Holdings for another 11 million new Sunoco LP units to a subsidiary of ETP.

Susser Holdings will be owned by Sunoco LP's indirect wholly owned subsidiary, Susser Petroleum Property Co. LLC.

  • Aug. 29, 2014: ETP acquired Susser Holdings, announced plan to drop Susser and Sunoco Inc. businesses into Sunoco LP.
  • Oct. 1, 2014: Sunoco LP acquired Mid-Atlantic Convenience Stores (MACS) from ETP in the first of the dropdowns in a transaction valued at approximately $768 million.
  • Dec. 16, 2014: Sunoco LP acquired Honolulu-based Aloha Petroleum for approximately $267 million in cash.
  • April 1, 2015: Sunoco LP acquired a 31.58% equity interest in Sunoco LLC (the entity that owns Sunoco’s legacy fuel distribution business) from ETP for approximately $816 million.
  • Additional dropdown inventory remaining at ETP consists of legacy Sunoco retail marketing and 68.42% of Sunoco LLC fuel distribution businesses expected to be dropped by the end of 2016

Susser Holdings' assets consist primarily of approximately 680 Stripes-branded convenience stores that sell motor fuel and merchandise in Texas, Oklahoma and New Mexico. Stripes is the leading independent operator of c-stores in Texas based on store count and retail motor fuel volumes sold. The majority of the Stripes locations include foodservice, primarily through its proprietary Laredo Taco Co. concept, which serves fresh, hot, made-to-order Mexican food.

For Sunoco LP, the addition of significant size and scale will deliver new organic growth opportunities and enhance its ability to focus on a broad range of third-party acquisition opportunities. The dynamic EBITDA growth at Susser Holdings creates a strong runway for increasing distributable cash flow beginning in 2016.

Susser provides a platform for significant growth. It has a robust organic growth platform through its new-to-industry (NTI) store build program--59% of growth is attributed to organic net-new store builds--and a successful track record of acquiring growth--41% of growth is attributed to acquisitions.

It is trending towards larger, more profitable store layouts; average store size is approximately 4,000 square feet, but new, larger store layout greater than 5,000 square feet generates two to three times the cash flow.

It has an in-house land bank of attractive retail store locations owned or under option, which provides a pipeline for continued store development and growth.

And it currently has 61 sites in the land bank that are scheduled to be built in 2016 and beyond. It has forecasted 40 new locations in 2015.

Sunoco LP has forecasted that it will have 187 total Sunoco fuel-branded Stripes locations by yearend 2015--146 existing Stripes stores to be rebranded to Sunoco fuel, and 41 NTI stores to be opened under the Sunoco fuel brand.

Houston-based Sunoco LP is a master limited partnership (MLP) that primarily distributes motor fuel to convenience stores, independent dealers, commercial customers and distributors. It also operates more than 830 convenience stores and retail fuel sites. It conducts its business through wholly owned subsidiaries, as well as through its 31.58% interest in Sunoco LLC, in partnership with an affiliate of its parent company, ETP. While primarily engaged in natural gas, natural gas liquids, crude oil and refined products transportation, ETP also operates a retail and fuel distribution business through its interest in Sunoco LLC, as well as wholly owned subsidiary, Sunoco Inc., which operate approximately 440 convenience stores and retail fuel sites.

Click here to view the complete investors' presentation with more details.

Part of CSP's 2015 Convenience Top 101 retailers