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Mergers & Acquisitions

CST, CrossAmerica Close on Dropdowns

Also close on acquisition of One Stop convenience stores

SAN ANTONIO & ALLENTOWN, Pa. -- CST Brands Inc. and CrossAmerica Partners LP have announced the closing of the previously announced dropdown transactions between the two companies. CST Brands CrossAmerica dropdowns

The transactions entailed the acquisitions of the real property associated with 29 new-to-industry stores (NTIs) and an additional 12.5% interest in CST Fuel Supply LP for aggregate consideration of $142 million in cash and 3.6 million newly issued common units representing limited partner interests in CrossAmerica. With this transaction CST Brands now holds approximately 5.1 million common units of CrossAmerica.

In addition, CrossAmerica has announced that it closed on the previously announced purchase of the One Stop convenience-store network based in Charleston, W.Va. The purchase includes 41 company-operated One Stop convenience stores, along with four commission agent sites, nine dealer fuel supply agreements and one freestanding franchised quick-service restaurant (QSR).

All of the approximately $183.9 million of cash consideration for these transactions was financed under the partnership's credit facility. The partnership expects the acquisitions to be accretive to distributable cash flow to limited partners.

The independent executive committee of the board of directors of CST Brands and the independent conflicts committee of the board of directors of the general partner of CrossAmerica have, as applicable, approved the terms of the dropdowns of the 29 NTI stores and 12.5% interest in CST Fuel Supply from CST Brands to CrossAmerica.

San Antonio-based CST Brands is one of the largest independent retailers of motor fuels and convenience-store merchandise in North America. It employs more than 14,000 people at nearly 1,900 locations throughout the southwestern United States, New York and eastern Canada offering a broad array of convenience merchandise, beverages, snacks and fresh food.

In the United States, CST Corner Stores sell fuel and signature products such as Fresh Choices baked and packaged goods, U Force energy and sport drinks, Cibolo Mountain coffee, FC Soda and Flavors2Go fountain drinks. In Canada, CST is the exclusive provider of Ultramar fuel, and its Dépanneur du Coin and Corner Stores sell signature Transit Café coffee and pastries. CST also owns the general partner of CrossAmerica Partners.

Allentown, Pa.-based CrossAmerica is a leading wholesale distributor of motor fuels and owner and lessee of real estate used in the retail distribution of motor fuels. Its general partner, CrossAmerica GP LLC, is a wholly owned subsidiary of CST.

Formed in 2012, CrossAmerica Partners distributes fuel to more than 1,100 locations and owns or leases more than 750 sites in 21 states: Pennsylvania, New Jersey, Ohio, Florida, New York, Massachusetts, Kentucky, New Hampshire, Maine, Tennessee, Maryland, Delaware, Illinois, Indiana, West Virginia, Virginia, Texas, Minnesota, Michigan, Wisconsin and South Dakota. CrossAmerica also distributes fuel in Georgia and North Carolina.

The partnership has long-term established relationships with several major oil brands, including ExxonMobil, BP, Shell, Chevron, Sunoco, Valero, Gulf and CITGO. CrossAmerica ranks as one of ExxonMobil's largest distributors by fuel volume in the United States and in the top 10 for many additional brands.

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