WESTLAKE, Ohio – Continuing its quest to expand its convenience-store network, TravelCenters of America has acquired 21 Thoroughbred Energy-branded c-stores in Kentucky from Traxx Cos.
As reported in a 21st Century Smoke/CSP Daily News Flash, the travel center and c-store retailer said it also expects to acquire 13 additional principally leased locations upon the seller satisfying certain closing conditions.
The portfolio of assets includes 32 company-operated convenience stores, two dealer-operated c-stores and their related fuel supply contracts and wholesale fuel supply contracts for another 11 dealer locations; 17 of the c-stores are owned fee simple, and the remaining 17 are leased or ground leased.
TA, which confirmed the acquisition, said it has begun to operate all of the acquired c-stores and substantially all of the to-be-acquired stores and expects these 34 stores, which average more than 3,100 square feet in size, will be rebranded as Minit Mart convenience stores. The sites will undergo improvements in the coming months.
Thoroughbred Energy LLC is based in Lexington, Ky., with operations clustered around the greater Lexington area and in southern Kentucky along Interstate 75. With the sale, it is getting out of convenience stores.
The company, a unit of Traxx Cos., is the largest wholesale and retail Shell Oil-branded distributor in Kentucky. Based in Lexington, Traxx is a holding company that owns and operates a portfolio of diversified business throughout the Bluegrass State.
Thoroughbred Energy was founded in 1986 by Dudley Webb, a commercial real-estate developer, along with Paul Koshgerian, whose background was in motor fuels distribution. Jay Hall, a restaurant chain operator, joined the company in 1987 and has managed the operations of the company for the last 28 years.
In 1996, the company entered into a joint venture with Shell whereby the parties contributed their real-estate holdings in the Lexington market to the joint venture and Thoroughbred became the Lexington-area jobber for Shell. The company expanded over the next eight years, and in 2004, Thoroughbred bought out Shell’s ownership in the joint venture. Thoroughbred continued it expansion through site acquisitions and building new-to-industry sites.
“The decision to exit the industry was a tough one for the Thoroughbred team. The founders, our fourth partner and attorney Mr. Ronald Tritschler, and all our great employees poured their lives into this company for nearly three decades. The relationships found and fostered will remain,” said Jay Hall, president and CEO of Thoroughbred Energy.
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Matrix Capital Markets Group Inc., Richmond, Va., provided merger and acquisition advisory services to Thoroughbred Energy. TA "has acquired a tremendous chain of stores in a very attractive and improving Lexington market with this acquisition,” said Cedric Fortemps, managing director of Matrix.
Thomas Kelso, managing director and head of Matrix’s Downstream Energy & Retail Group, added, “Dudley Webb, together with Mr. Hall, built an exceptional company."
For TA, this latest acquisition is part of its previously disclosed acquisitions of 124 c-stores for about $230 million in six separate transactions between August and the end of the year, with additional transactions in the works.
Earlier this month, the company completed its acquisition of 33 c-stores in northern Illinois with the purchase of MKM Oil Co.’s Fast N Fresh chain.
Assuming that all of these acquisitions close, “our convenience-store portfolio will have grown from 34 locations principally in one state at the beginning of the year to over 200 locations in 11 principally Midwest states,” said CEO Thomas O’Brien during the company’s recent second-quarter 2015 earnings call.
TA began its expansion into the convenience-store space when it purchased 31 Minit Mart stores in the Bowling Green, Ky., from Fred Higgins in 2013 for $67 million. Since then, it remained low-key until a burst of recent M&A activity this year.
During first-quarter 2015, TA acquired two travel centers, including one the company previously operated under a management agreement, for $8.4 million, and 26 convenience stores for $38.7 million, in three separate transactions including 19 Best Oil Little Stores, mostly in Minnesota. Additionally, during second-quarter 2015, it acquired 19 convenience stores principally in Kansas and Missouri from Overland Park, Kansas-based GasMart USA for $27 million.
Westlake, Ohio-based TA operates 370 convenience stores, including 256 located at travel centers, in 43 states and Canada under the Minit Mart, TA and Petro Stopping Centers brands.
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