BP Products North America Inc., a wholly owned indirect subsidiary of BP plc, has reached an agreement to purchase travel center operator TravelCenters of America. The acquisition, which is subject to regulatory and TravelCenters of America shareholder approval, will be for $1.3 billion in cash.
The acquisition price represents a multiple of around six times based on last 12 months’ TA EBITDA. It is expected to add EBITDA for bp immediately, growing to around $800 million in 2025.
The acquisition is expected to bring around 280 TravelCenters of America sites, spanning 44 states nationwide, into the bp portfolio. These travel centers, which average around 25 acres, offer a full range of facilities for vehicles and fleet trucks, including more than 600 full-service and quick service restaurants, as well as truck maintenance and repair services. Around 70% of TA’s total gross margin is generated by its convenience services business, almost double bp’s global convenience gross margin.
- bp America Inc./Thorntons is No. 7 and TravelCenters of America is No. 28 on CSP’s 2022 Top 202 ranking of U.S. convenience-store chains by company-owned store count.
Westlake, Ohio-based TA’s strategically located network of highway sites complements bp’s existing predominantly off-highway convenience and mobility business, enabling TA and bp to offer fleets a seamless nationwide service, it said. In addition, bp’s global scale and reach will, over time, bring advantages in fuel and biofuel supply as well as convenience offers for consumers, said the company. It will provide options to expand and develop new mobility offers including electric vehicle (EV) charging, biofuels, renewable natural gas (RNG) and later hydrogen, both for passenger vehicles and fleets.
“This is bp’s strategy in action,” said Bernard Looney, CEO of London-based bp. “We are doing exactly what we said we would, leaning into our transition growth engines. This deal will grow our convenience and mobility footprint across the U.S. and grow earnings with attractive returns. Over time, it will allow us to advance four of our five strategic transition growth engines. By enabling growth in EV charging, biofuels and RNG and later hydrogen, we can help our customers decarbonize their fleets. It’s a compelling combination.”
The announcement is the culmination of a comprehensive process by TA’s board, according to the company. Following the implementation of TA’s turnaround plan and several quarters of improved operating performance, TA received unsolicited interest to be acquired. In response, TA’s board hired financial and legal advisors as part of a formal process to consider a potential sale. This process ultimately included competitive rounds of bidding from potential buyers that resulted in the transaction announced today, unanimously approved by the TA Board of Directors, said TA.
“Today’s announcement that bp is acquiring TA for $86 per share is a result of the successful implementation of our turnaround and strategic plans,” said Jonathan Pertchik, CEO of TA. “We have improved our core travel center business, expanded our network, launched eTA to prepare for the future of alternative fuels and improved our operating and financial results, none of which we could have accomplished without the hard work and dedication of our employees at every level.”
Dave Lawler, chairman and president of bp America, Chicago, said, “Subject to approvals, we look forward to welcoming the TA team to bp. TA's amazing nationwide network of on-highway locations combined with bp's more than 8,000 off-highway locations have the potential to offer travelers and professional drivers a seamless experience for decades to come.”
As part of the transaction, TA will enter into amended lease agreements with Service Properties Trust, establishing long-term real estate access, and bp looks forward to continuing TA’s existing strong relationship with SVC.
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