ALLENTOWN, Pa. -- In a deal that enhances its geographic diversity and provides it access to a new market region, Lehigh Gas Partners LP has entered into an asset purchase agreement with Rocky Top Markets LLC and Rocky Top Properties LLC on Aug. 1, 2013 whereby the partnership will purchase 30 gas stations in the Knoxville, Tenn., area. It will also enter into leases for four stations, assume seven third-party supply contracts and purchase certain equipment and other assets at the sites for a total consideration of $36.9 million.
Lehigh Gas partnership will pay $10.7 million at closing for one fee property site, the four leasehold sites, the seven third-party supply contracts and certain other equipment and assets associated with the sites. Concurrent with the closing, the partnership will enter into a master lease for the remaining 29 stations.
On or after Aug. 1, 2015, the partnership will purchase the 29 stations for $26.2 million, the remaining balance of the purchase price.
The partnership has agreed to lease or sublease the 34 sites in a 15-year agreement to Lehigh Gas Ohio LLC, which separately agreed to purchase fuel and merchandise inventory and certain other assets at the sites from Rocky Top. The partnership will also supply fuel to Lehigh Gas Ohio at these sites under a 15-year agreement.
The 34 sites are located in and around Knoxville and along Interstate 40 and 75. In aggregate, including the assumed third-party supply contracts, the total portfolio sold 34.1 million gallons of motor fuel in 2012. And 31 of the 34 sites are Shell branded.
Rocky Top Market c-stores are known not only for their gasoline, food and drink, and other convenience items, but for their 12 Aqua Jet "touchless" car wash systems, as well.
"We are extremely excited to enter into the Knoxville market and to establish a presence in Tennessee," said chairman and CEO Joe Topper. "We are pleased to be able to acquire assets of the quality of Rocky Top and to add to our Shell portfolio. The acquisition provides us a solid platform in the region that we hope to grow over time."
Lehigh Gas Partners, Allentown, Pa., is a leading wholesale distributor of motor fuels and owner and lessee of real estate used in the retail distribution of motor fuels. Formed in 2012, Lehigh Gas Partners owns or leases more than 500 sites in nine states: Pennsylvania, New Jersey, Ohio, Florida, New York, Massachusetts, Kentucky, New Hampshire and Maine. The company is affiliated with several major oil brands, including ExxonMobil, BP, Shell, Chevron, Sunoco and Valero.