Mergers & Acquisitions

Lehigh Gas High on Acquisitions

"Pleased with success" of Rogers, Rocky Top transactions, Topper telegraphs more to come

ALLENTOWN, Pa. -- Vowing to "remained disciplined in … pursuit of acquisitions," Lehigh Gas Partners LP chairman and CEO Joseph Topper Jr. said during the company's third-quarter conference call that the executives are "pleased at the success we've had in the acquisition market this past year."

Lehigh Gas Partners

Lehigh Gas completed its master limited partnership (MLP) initial public offering (IPO) in Oct. 2012. "Since our IPO, we have closed on approximately $132 million of acquisitions," he continued. "We have completed four major acquisitions for a total consideration of approximately $132 million. The four acquisitions added 121 sites to our owned or leased site portfolio, an increase of approximately 28% from the leased and owned site portfolio at the time of the IPO. Through these acquisitions, we have added four more states to operations and diversified our geographic footprint, which helps to reduce our fuel margin volatility."

In Dec. 2012, the partnership acquired the 45-unit Express Lane Inc. and another 24 stores in northeastern Pennsylvania from related entities Dunmore Oil Co. Inc. and JoJo Oil Co. Inc.

During the current quarter, on Sept. 19, 2013, the partnership closed on the acquisition of 13 fee and four leasehold sites from Rogers Petroleum Inc. for $20 million. It later purchased one of the four leasehold sites for $1.1 million, bringing the aggregate total consideration to $21.1 million. The 13 Zoomerz and four Exxon sites are located in eastern Tennessee.

On Sept. 24, 2013, the partnership closed on the acquisition of 30 fee and three leasehold sites from Rocky Top Markets LLC and Rocky Top Properties LLC in and around Knoxville, Tenn., for $36.8 million, paying $10.6 million at closing. Together, the 50 sites acquired in the two deals increased the partnership's owned or leased portfolio of sites by approximately 10%.

The partnership financed the $21.1 million Rogers purchase price and the $10.6 million paid at closing in the Rocky Top transaction under the partnership's credit facility.

During the quarter, the partnership also assumed 50 commission agent site leases and related commission agent agreements from affiliate Lehigh Gas - Ohio LLC (LGO).

Emphasizing the importance of acquisitions, Topper said, "Our ability to grow our distributable cash flow is driven in large part by ability to find and execute on attractive acquisition opportunities."

"As a result of our success in the acquisition market, we are pleased this quarter to announce a 5.2% distribution increase, our third consecutive quarterly distribution increase," he announced.

He promised that Lehigh Gas executives will "continue to be on the lookout for attractive acquisitions and are constantly evaluating potential opportunity."

(Click here for details on Lehigh Gas Partners' third-quarter financial results.)

Lehigh Gas Partners, Allentown, Pa., is a leading wholesale distributor of motor fuels and owner and lessee of real estate used in the retail distribution of motor fuels. Formed in 2012, Lehigh Gas Partners owns or leases more than 500 sites in 12 states: Pennsylvania, New Jersey, Ohio, Florida, New York, Massachusetts, Kentucky, New Hampshire, Maine, Tennessee, Georgia and Virginia. The company is affiliated with several major oil brands, including ExxonMobil, BP, Shell, Chevron, Sunoco and Valero.

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