WESTLAKE, Ohio -- TravelCenters of America LLC appears to be taking its Minit Mart moniker on the road, announcing it will brand its burgeoning network of convenience stores as well as its truckstop travel stores with the name it acquired in a 2013 buyout, Tom O’Brien, CEO for TravelCenters of America, said during the company’s first-quarter 2015 earnings call.
The truckstop and travel center chain began expansion into the convenience store space when it purchased 31 Minit Mart stores in the Bowling Green, Ky., area, from Fred Higgins in 2013 for $67 million. Since then, it remained low-key until a burst of recent M&A activity, growing from 34 locations at the beginning of 2015 to 114 (including those under contract).
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, including 19 Best Oil Little Stores mostly in Minnesota. Additionally, during second-quarter 2015, it has acquired 19 convenience stores principally in Kansas and Missouri, from Overland Park, Kansas-based GasMart USA for $27 million.
He added, “We have purchase agreements in place for … two travel centers and 35 convenience stores, for an aggregate of $82 million. Including the sites we currently have under contract, our standalone gasoline station, convenience store operations will have grown from 34 locations at the beginning of 2015, to 114 locations principally located in Kentucky and throughout the Midwest.”
“We intend to bring in all of these convenience stores as Minit Marts and to upgrade the gasoline, food and other customer offerings,” said O’Brien, who in the past noted its strength as a national fuel jobber as an advantage in the c-store arena. “We also expect to begin branding our truckstop travel stores with the Minit Mart name.”
He continued, “While much of our recent acquisition activity has been in convenience stores, we remain committed to continued growth of a truckstop network, and a number of opportunities are currently being evaluated. … We also expect to undertake a limited amount of new-build truckstop development projects. To date, we’ve broken ground on one, new full-service travel center in Texas, and we expect to break ground on three others later in 2015 or early in 2016.”
When asked about the recent mergers and acquisitions environment, O’Brien said, “I haven’t seen much in the way of … for lack of a better term, crazy. Certainly I haven’t participated in any of it.”
He added, “On the c-store side, I think we’re seeing what anybody is seeing, which is [multiples of] six-to-eight times EBITDA [earnings before interest, taxes, depreciation and amortization], but a faster ramp-up period.”
Like many other publicly traded fuel retailers, TA officials also reported significant growth in margins and profits due to the sudden freefall in crude prices that occurred last fall. With TA, the events led to an increase of 18% in fuel-gross margins and $20 million improvement in first-quarter 2015 versus the year before.
In terms of non-fuel sales, O’Brien said the only weak spot was its repair business, with revenue affected by single-digit percentages as the result of competition in the tire market.
Growth in the company’s quick-serve restaurants (QSRs), c-stores and other ancillary revenues was otherwise in the double digits, he said.
“So I’m pretty pleased with the things that we’ve done to push non-fuel revenue, in as much as it is a reflection of some of the things that we do on internal growth,” O’Brien said.
The Westlake, Ohio-based company operates 251 travel centers and 60 convenience stores with retail gas stations in 43 U.S. states and in Canada, operated primarily under the TravelCenters of America (TA), Petro and Minit Mart names.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.