HOUSTON -- In an acquisition that complements its existing wholesale fuel distribution business in the northeastern United States, Sunoco LP, through a subsidiary, has completed the purchase of a wholesale motor fuel distribution business from Alta East Inc. for approximately $57 million plus the value of inventory on hand at closing.
The deal was first reported in August.
As reported in a 21st Century Smoke/CSP Daily News Flash, the business distributes approximately 55 million gallons a year of branded and unbranded gasolines, including the Sunoco, Mobil and Valero brands.
As part of the transaction, Sunoco LP's subsidiary also acquired a total of 32 fee and leased properties, including 30 properties which are currently operated by third-party dealers or commission agents and two non-operating surplus locations. The transaction also included supply contracts with the dealer-owned and operated sites.
Sunoco LP plans to integrate the new business into its extensive fuel distribution network serving 30 states. The convenience stores are primarily in New York from the greater New York City metropolitan area to just north of Lake George.
The company funded the transaction using amounts available under its revolving credit facility and is expected to be immediately accretive to Sunoco LP with respect to distributable cash flow.
Alta East, 100% owned by D.W. Porto, is based in Middletown, N.Y. His father, Doug Porto, ran Wallace Oil Co., which sold heating oil and propane, and also operated a chain of Mobil, Sunoco and Wally Mart gas stations and convenience stores.
After taking the reins of the company in 1990, Porto grew the business, through both acquisitions and organic growth, into an established, large distribution business with longstanding dealer relationships. Over just the last five years, the company added 23 dealer sites to its portfolio, including five stores in upstate New York from a Nice N Easy franchisee in 2013.
Matrix Capital Markets Group Inc., Richmond, Va., provided merger and acquisition advisory services to Alta East, which included valuation advisory, marketing of the company through a customized, confidential, structured sale process and negotiation of the transaction.
“Mr. Porto has built a sizeable and attractive distribution business in New York," said
Cedric Fortemps, managing director at Matrix. He co-managed the transaction with Thomas Kelso, managing director and head of the Downstream Energy & Retail Team.
Houston-based Sunoco LP is a master limited partnership (MLP) that operates more than 850 convenience stores and retail fuel sites and distributes motor fuel to convenience stores, independent dealers, commercial customers and distributors located in 30 states at approximately 6,800 sites, both directly as well as through its 31.58% interest in Sunoco LLC, in partnership with an affiliate of Energy Transfer Partners LP (ETP). SUN's general partner is owned by Energy Transfer Equity LP (ETE).
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