SANTIAGO, Chile, and BRENTWOOD, Tenn. -- Looking to enter the U.S. convenience-store arena, Compañía de Petróleos de Chile S.A. (COPEC) has entered into a definitive agreement with Delek U.S. Holdings Inc. for COPEC, through its U.S. subsidiary Copec Inc., to acquire 100% equity interest in Mapco Express Inc. for $535 million.
“The acquisition of Mapco represents an important step for COPEC’s entry into the U.S. convenience-store market, which has been identified as a key strategic growth opportunity,” said Lorenzo Gamuri, CEO of COPEC, a subsidiary of holding company Empresas Copec S.A., Santiago, Chile. “Mapco’s assets are located in a geographic zone with interesting demographic attributes and with the size for a proper competitive operation in the U.S. market. After buying into the control of Organización Terpel in 2010, this is the second significant step to transform Copec into a broader company in the fuel retail and convenience-store market.”
Delek—following a strategic review of options for its retail assets that included a dropdown to Delek Logistics Partners LP—determined that the sale to COPEC was an “efficient and prudent” way to unlock shareholder value.
“We have unlocked the value of our retail assets through this transaction with COPEC,” said Uzi Yemin, chairman, president and CEO of Delek U.S., Brentwood, Tenn. “I want to thank the Mapco team for their efforts in developing the Mapco brand. The compelling valuation we were able to achieve is a direct result of their hard work. This transaction creates an exciting opportunity for Mapco and its employees, as it becomes a key component of COPEC’s U.S. growth strategy. Delek also gains a partner in retail fuel sales and will continue to supply locations through its wholesale business and space on the Colonial Pipeline system.”
Delek U.S. is a diversified downstream energy company with assets in petroleum refining, logistics and c-store retailing. It also owns approximately 48% of the outstanding common stock of Alon USA Energy Inc., Dallas. No word on how or if the transaction will affect Alon USA or its retail brands Alon Brands.
Mapco has 348 corporate-owned convenience stores operating primarily in Tennessee, Alabama and Georgia, with additional presence in Arkansas, Virginia, Kentucky and Mississippi. It operates company stores under the banners Mapco Express, Mapco Mart, East Coast, Fast Food and Fuel, Favorite Markets, Delta Express and Discount Food Mart. It also provides fuel to 142 dealer locations and provides logistical fuel transportation to Mapco and third parties.
- Click here for CSP's look inside Mapco.
As reported in a McLane/CSP Daily News Flash, COPEC is one of the largest companies in Chile, operating in fuel and lubricants distribution and convenience stores. COPEC has an existing presence in the channel with the largest c-store network in Chile and approximately 53% of Chilean gasoline market share with 626 company- and dealer-operated service stations, 82 Pronto-branded c-stores and 220 Punto-branded c-stores. It is an industry innovator with Pagoclick mobile pay and Zervo self-service fueling dispenser and a c-store developer with multiple formats for urban, suburban and highway locations.
Also, COPEC has a majority ownership stake (58.9%) in Organización Terpel S.A., Bogota, Colombia, which accounts for approximately 45% of Colombia’s fuel market share. Terpel has 1,949 Terpel-branded gas stations in Colombia and 233 stores in Panama, Ecuador, Peru and Mexico under store brands Altoque and Deuna selling Terpel-branded fuel.
COPEC will generally retain Mapco’s current retail team to provide for a “seamless” entrance into the U.S. convenience-store market, the company said.
As part of this transaction, Delek will continue to supply fuel to certain Mapco retail locations under an 18-month supply agreement.
The transaction has received unanimous approval of both boards of directors and is subject to customary regulatory and closing conditions. The companies said they anticipate that the transaction will close by the end of the year, funded by cash on hand. Approximately $160 million in debt associated with the retail assets will be repaid at closing
RBC Capital Markets LLC served as Delek’s exclusive financial adviser. Raymond James & Associates Inc. was COPEC’s financial adviser.