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Mergers & Acquisitions

Par Pacific Closes Acquisition of 33 Cenex Zip Trip C-Stores

CHS sells sites in Washington and Idaho, retains locations in five other states

HOUSTON --Par Pacific Holdings Inc. has completed its acquisition of 33 Cenex Zip Trip convenience stores from CHS Inc. for a total consideration of $70 million and the value of inventory at closing. With the closing of the deal, Par Pacific is focused on retail, company executives said.

CHS acquired the 33 Zip Trip convenience stores in the Spokane area, owned in part by Jopo Inc. and Jo-By Enterprises LLC, in 2008. Most of the stores are in metropolitan Spokane, with additional facilities in Clarkston, Wash., and in Lewiston, Couer d'Alene, Grangeville, Moscow and Bonners Ferry, Idaho. The sale to Par Pacific did not include 35 Cenex Zip Trip locations in Minnesota, Montana, North Dakota, South Dakota and Wyoming, which CHS will continue to own and operate.

As reported in a CSP Daily News Flash, as part of the transaction, the parties have entered into a multiyear branded petroleum marketing agreement for the continued supply of Cenex-branded refined products to the Cenex Zip Trip stores. In addition, the parties have entered into a multiyear supply agreement pursuant to which an affiliate of Par Pacific will supply refined products to CHS within the Rocky Mountain and Pacific Northwest markets.

"We are pleased to close this acquisition, which extends our Rocky Mountain activities and provides an alternative outlet for our Wyoming refining production," said William Pate, Par Pacific's president and CEO.

“We found that the stores to be acquired are in good physical shape due to a recent capital investment program by CHS to refurbish and modernize the store locations,” Pate said during a January conference call about the deal.

“Having a small retail portfolio in Spokane, which we viewed as an attractive market ... is our first step into the Rocky Mountains outside of the Wyoming refining and logistics operations,” Pate said. “And it gives us an opportunity to think about growth beyond these retail locations. As we've always said, we felt that Wyoming was an attractive refining market. We think Rapid City is an attractive retail market. We'd like to continue to grow in that region, and we like the characteristics of the Rocky Mountain region in general and also the Pacific Northwest. ... As we look at other opportunities in Hawaii as well as in the Rocky Mountains, our focus is on retail and logistics."

Par Pacific said it anticipates adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) from the acquired stores to be approximately $7 million to $7.5 million in the first full year of operations.

CHS, Inver Grove Heights, Minn., is a global agribusiness owned by farmers, ranchers and cooperatives across the United States. In addition to its agriculture, food business segments and other operations, the company owns two petroleum refineries and more than 2,500 miles of pipeline. CHS manufactures, markets and distributes refined fuels, lubricants, propane and renewable energy products through a network of more than 1,500 Cenex-branded retail fuel outlets in 19 states, including its Cenex Zip Trip chain of c- stores.

Richmond, Va.-based Matrix Capital Markets Group Inc. advised CHS on the sale, providing merger and acquisition advisory services to CHS, including valuation advisory, marketing the business through a confidential, structured sale process and negotiation of the transaction.

Par Pacific, Houston, owns, manages and maintains interests in energy, related retailing and infrastructure businesses. It owns and operates one of the largest energy infrastructure networks in Hawaii, with a 94,000-bpd refinery, a logistics network supplying the major islands of the state and 91 retail locations. In Wyoming, Par Pacific owns a refinery and associated logistics network in a niche market.

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