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Wednesday, January 7, 2015

Insider’s View: 2014 M&A Review Pt. 1
A look back at a year of shocking and surprising c-store deals

Source: CSP Daily News
By Dennis L. Ruben, Executive Managing Director, NRC Realty & Capital Advisors LLC

SCOTTSDALE, Ariz. -- The year 2014 will be remembered as one of blockbuster deals by master limited partnerships (MLPs). Of the four very large convenience–store transactions that were completed or announced during the year, the purchasers in three of them were existing or acquired MLPs.

Speedway LLC/Hess Corp.

In May, Hess Corp. surprised the industry by announcing it would sell its entire retail network and transport operations to Marathon Petroleum Corp.’s Speedway LLC subsidiary for $2.82 billion, which represented an EBITDA multiple in the low to mid-teens, according to industry analysts. Hess is the largest operator of c-stores along the East Coast and the fifth largest in the United States by number of company-operated sites, with 1,256 stores in 16 states. The transaction brought the combined number of Speedway company-owned stores to 2,733, which puts the company close to the top by number of locations. Speedway said it will rebrand all Hess locations within three years.

Energy Transfer Partners LP/Susser Holdings Corp.

To the shock of everyone in the industry, Energy Transfer Partners LP (ETP), parent company of Sunoco Inc., announced during the second quarter the purchase of Susser Holdings Corp. (SHC) and its 630-store chain based in Corpus Christi, Texas, for a total consideration of $1.8 billion. According to industry insiders, this purchase price represented an EBITDA multiple of 11x to 13x.

Following the initial purchase of SHC, a series of drop-down transactions will occur whereby existing ETP and SHC retail business units will be sold to Susser Petroleum Partners LP. This process will result in the combination of ETP’s fuel brand and Susser’s Stripes convenience stores. The merger transaction was completed in late August.

ETP also announced the acquisition of 40 Tigermarket convenience stores in Tennessee from Tiger Management.

In late September, an ETP affiliate signed an agreement to acquire Honolulu-based Aloha Petroleum Ltd., Hawaii’s largest independent gasoline marketer and one of the largest c-store operators on the islands, for about $240 million. Aloha markets in approximately 100 stores throughout the state, about half of which are company-operated.

In October, Susser Petroleum Partners LP officially changed its name to Sunoco LP. ETP has announced that it intends to continue its aggressive growth campaign in 2015.

CST Brands Inc./CrossAmerica Partners LP

It was certainly a busy year for CST Brands I