FRANKLIN, Tenn.-- In a move that may raise $230 million for debt reduction and possibly more growth via acquisition, Delek USA, the owner of the MAPCO Express chain of convenience stores, has filed papers with the Securities& Exchange Commission, initiating steps to go public.
Capital raised appears earmarked for operational costs and the paring down of the company's $52 million in debt, according to various sources, but in its SEC filing, the Franklin, Tenn.-based company revealed its intentions to grow on both the refining and retailing ends.[image-nocss]
Company officials have said little about the initial filing to the SEC, and attempts to contact them for comment were unsuccessful; however, via its company website and other company-initiated communications, the 349-store chain has expressed strategic growth plans to expand to over 500 stores in the next three years.
In 2004, the company purchased Fort Payne, Ala.-based Williamson Oil, an acquisition that consisted of 89 company-operated c-stores and 11 stores operated by independent dealers. The company in the past has said target acquisitions would occur in Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina and Texas, in addition to Tennessee and Virginia.
MAPCO in recent years has made aggressive strides with its c-store programs. Just last month, the company announced the grand opening of two ultimate convenience stores, one in Brentwood and one in Hendersonville, Tenn. The stores, known as MAPCO Marts, feature made-to-order food, about 20 premium hot beverages at newly designed serving stations, upscale breads and a walk-in beer cave, as well as indoor seating and an upscale exterior-interior design.
The new MAPCO Marts also offer custom-designed, bilingual, touchscreen terminals inside the store and at pump islands. These terminals allow customers to order food while fueling.
MAPCO Mart is the ultimate convenience store, and there's nothing quite like it in the market, said Paul Pierce, vice president of marketing for MAPCO. Everyone who has more to do and less time to do it will appreciate the extra quality and convenience of the streamlined preparation of high-quality food and the expanded merchandise and services.
Further upstream of the supply equation, the company purchased a refinery in Tyler, Texas, in the spring of last year, furthering an integrated philosophy with regards to petroleum products.
Overall, the company reported growth in earnings since 2002, with significant jumps after its most recent retail and refining acquisitions. For the nine months ended Sept. 30, 2005, and the year ended Dec. 31, 2004, the company reported net sales of $1.4 billion and $857.9 million, respectively; net income of $39.5 million and $7.3 million, respectively; and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $98.5 million and $31.9 million, respectively.
Increases in retail net sales jumped 29% in the first nine months of 2005 to $799 million compared to the same nine-month period in 2004, with merchandise sales increasing 14.7% over the same nine-month time periods.
Delek USA's parent company, Delek Petroleum Ltd., is an Israeli company based in the municipality of Netanya. Delek's moves in the United Statesto acquire more of an integrated approach to petroleum and c-store supply and retailmimic tactics of another Israeli-based company, ALON Israel,Tel Aviv. ALON purchased the Fina petroleum assets in Texas in 2000 and has since pursued an approach that ties its retail properties geographically to its refining and supply arms.
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