Mergers & Acquisitions

SUN Shines Again

As it drops down MACS, ETP leveraging national brand equity with Sunoco name

HOUSTON & DALLAS -- Energy Transfer Partners LP wholly owned subsidiary Susser Petroleum Partners LP--soon to be renamed Sunoco LP (stock ticker symbol: SUN)--is acquiring Mid-Atlantic Convenience Stores LLC (MACS) from ETP in a dropdown transaction valued at approximately $768 million.

Susser Energy Transfer Partners (ETP) Sunoco Mid-Atlantic Convenience Stores (MACS) (CSP Daily News / Convenience Stores / Gas Stations)

As reported in a 21st Century Smoke/CSP Daily News Flash, the company intends the name change to align the partnership's legal and marketing name with that of ETP's iconic brand, Sunoco. "The partnership is proud to be able to trade under the SUN symbol, which traded on the New York Stock Exchange for almost 87 years until the sale of Sunoco to ETP in October 2012," it said.

With ETP's acquisition, Sunoco Inc. ceased to be a publicly traded company and its common stock discontinued trading on the New York Stock Exchange (NYSE). When ETP acquired Susser Holdings Corp., it also ceased to be a publicly traded company and its common stock discontinued trading on the NYSE in August 2014.

The company expects the name and stock symbol change to occur in fourth-quarter 2014, it said.

The Sunoco name provides national versus regional recognition, ETP spokesperson Vicki Granado told CSP Daily News. "If you look at the heritage, history and strength of the Sunoco name, it's certainly the one they felt would give them the best positioning and leveraging platform to continue growth."

But the name change is not going to affect the company's retail brands. Granado said that at least today, "there's not going to be a rebranding of the Stripes stores" operated by Susser that are iconic within their own Texas market.

MACS machinations

The MACS dropdown, or transfer of assets from one business unit to a subsidiary, will include approximately 110 company-operated retail convenience stores and 210 dealer-operated and consignment sites from the MACS/Tigermarket businesses, both operated and supplied by ETP's Sunoco subsidiary. The combined portfolio includes locations in Virginia, Washington, D.C., Maryland, Tennessee and Georgia.

Greenwich, Conn.-based private-equity firm Catterton Partners formed Richmond, Va.-based MACS in 2010 from a series of major-oil and private-chain acquisitions. Philadelphia-based Sunoco acquired it in late 2013.

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The consideration Susser Petroleum will pay for MACS will consist of approximately four million newly issued common units and $556 million in cash, subject to customary closing adjustments. Susser Petroleum plans to finance the cash portion initially by using availability under the closing of a new $1.25 billion revolving credit facility, with longer-term financing through a combination of debt and equity.

Susser Petroleum closed a new revolving credit facility with a syndicate of banks that provides the $1.25 billion revolving credit facility as a base and includes an accordion feature that provides flexibility to increase the facility by an additional $250 million, subject to certain conditions. The facility matures in September 2019.

The expansion of the revolver from a current $400 million credit facility limit will allow the partnership to finance dropdowns and acquisitions and provide significant liquidity for ongoing organic growth.

ETP expects the MACS transaction to close in fourth-quarter 2014; it is subject to customary closing conditions, required consents and other regulatory approvals.

Dallas-based ETP acquired Sunoco in 2012 for approximately $2.6 billion. In April 2014, it entered into an agreement to acquire Corpus Christi, Texas-based Susser for approximately $1.8 billion.

ETP also announced that it has acquired Aloha Petroleum Ltd., Honolulu, for approximately $240 million. (See separate report on CSPnet.com and in CSP Daily News.)

Houston-based Susser Petroleum distributes approximately 1.7 billion gallons of motor fuel annually to Stripes and Sac-N-Pac convenience stores, independently operated consignment locations, convenience stores and retail fuel outlets operated by independent operators and other commercial customers in Texas, New Mexico, Oklahoma, Kansas and Louisiana.

ETP is a master limited partnership (MLP) owning and operating one of the largest and most diversified portfolios of energy assets in the United States. It owns 100% of Sunoco Inc., with a network of more than 5,000 Sunoco-branded retail sites in 24 states, and 100% of Susser Holdings, which operates more than 640 convenience stores, primarily in Texas.

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