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Mergers & Acquisitions

Sunoco LP Completes Acquisition of Interest in Fuel Distribution Business

MLP closes senior notes offering

HOUSTON --Sunoco LP has announced that it has completed the acquisition of a 31.58% equity interest in Sunoco LLC, from ETP Retail Holdings, an affiliate of Energy Transfer Partners (ETP). The transaction is valued at approximately $816 million. Sunoco LP paid $775 million in cash and issued to ETP 795,482 new SUN units valued at $40.8 million. Sunoco LP ETP (CSP Daily News / Convenience Stores / Gas Stations)

The acquisition was funded using proceeds from the previously announced issuance of senior notes that was also completed today. Sunoco LP issued $800 million of 6.375% senior notes due 2023 through a private offering. The notes were co-issued by Sunoco LP and Sunoco Finance Corp., a wholly owned subsidiary. Net proceeds totaled $789.2 million.

The company also used a small portion of the proceeds to repay outstanding borrowings under its senior secured revolving credit facility.

Sunoco LLC distributes approximately 5.3 billion gallons per year of motor fuels to customers in more than 26 states in the East, Midwest and Southeast regions of the United States to:

  • Sunoco Inc. (owned by ETP) for resale at approximately 440 company-operated Sunoco and APlus branded convenience stores and other retail fuel outlets.
  • Approximately 880 Sunoco-branded dealer locations under long-term fuel supply agreements.
  • Other fuel distributors of Sunoco-branded fuel that supply approximately 3,640 additional third-party retail fuel outlets.
  • Approximately 400 other commercial customers under spot or short-term contracts.

Management expects that substantially all of the income from Sunoco LP's interest in Sunoco LLC will be qualifying income. The transaction is expected to be immediately accretive to SUN's distributable cash flow for 2015 and beyond.

Houston-based Sunoco LP is a master limited partnership (MLP) that primarily distributes motor fuel to convenience stores, independent dealers, commercial customers and distributors. It also operates more than 150 convenience stores and retail fuel sites. The company conducts its business through wholly owned subsidiaries, as well as through its 31.58% interest in Sunoco LLC, in partnership with an affiliate of its parent company, ETP. While primarily engaged in natural gas, natural gas liquids, crude oil and refined products transportation, ETP also operates a retail and fuel distribution business through its interest in Sunoco LLC, as well as wholly owned subsidiaries, Sunoco Inc. and Stripes LLC, that operate approximately 1,100 convenience stores and gas stations.

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