WESTLAKE, Ohio -- TravelCenters of America has no intention of abandoning the truckstop business, but the acquisition environment being what it is, expect it to continue its aggressive growth into the convenience-store industry, according to president and CEO Tom O'Brien.
"I believe in continuation of our travel-center acquisitions, but I also expect that based on what we currently see in the pipeline, that activity may not be high in the next year or so," O'Brien said during an earning conference call with investors on Nov. 9. "That said, as acquisition opportunities began to wane late last year in the travel-center space, we adapted our approach to growth activities."
That change included a move toward building more new-to-industry sites and a fresh focus on the c-store industry. The company plans to build five travel-center sites between now and early 2017, each of them to be sold to parent company and real-estate investment trust Hospitality Properties Trust.
"In other words, these sites will be added to our nationwide network for very little net investment," O'Brien said.
Click here for a look at TA's quarterly earnings.
On the c-store side, O'Brien said he sees "a large number of acquisition candidates that offer the potential for attractive returns, and which have become available as part of the wave of consolidation in that industry."
This suggests TA's recent aggressive move to bulk up its convenience-store arm—the chain has acquired 150 c-stores so far in 2015—will continue.
"We moved aggressively in the current year for a number of reasons," O'Brien said. "One, we have been in something like the convenience-store business for a long time as part of our truckstop business.
"Two, the c-store fuel business complements our existing fuel business. C-stores principally sell gasoline to consumers, and truckstops principally sell diesel to businesses. Although these are both fuel, the markets are different and distinct in many ways, and balancing these two products a bit more may tend to reduce our longer-term reliance on markets and structures that can be vague and include cyclical industries."
About the 181 c-stores TA purchased from December 2013 to the end of the third quarter 2015, O'Brien said, "We have only 14 yet to have their gasoline rebranding completed, and we have completed the Minit Mart-branding process at nearly half."
The rebranding process is expected to be completed during the first half of 2016. The addition of restaurants in selected sites will extend through 2016.
TA's travel centers operate under the TravelCenters of America, TA, Petro Stopping Centers and Petro brand names. TA's nationwide business includes travel centers located in 43 U.S. states and in Canada. TA convenience stores operate principally under the Minit Mart brand name in 11 states.
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