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Friday, July 10, 2015

Insider’s View: Q2 2015 M&A Review
Three themes emerge during an extraordinary period for acquisitions

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

SCOTTSDALE, Ariz. --The pace of mergers and acquisitions in the convenience-store industry showed no signs of subsiding during the second quarter of 2015. Three very large transactions were announced or completed during the quarter.

First, 7-Eleven Inc. agreed to acquire Tedeschi Food Shops and its 182 locations in the Northeast. Second, United Pacific, formerly known as United Oil Co., completed the acquisition of 251 gas stations and convenience stores from Pacific Convenience & Fuels LLC.  Finally, Global Partners LP completed the acquisition of a portfolio of 97 owned and leased gas stations and dealer supply agreements from Capitol Petroleum Group for approximately $156 million.

There were also many smaller transactions that were either announced or completed during the second quarter. The common themes throughout all of these transactions:

  • They were completed by one of the major players in the industry (either a master limited partnership, a major convenience-store owner and operator, or a private-equity sponsor).
  • Premium prices were paid for quality assets in high-growth and strategic markets.
  • There continues to be an unlimited appetite for acquisitions of all sizes and types, with there being far more interested buyers than sellers.
7-Eleven Inc.

In May, 7-Eleven Inc. entered into an agreement to acquire Tedeschi Food Shops, a 92-year-old, family-run, traditional convenience-store chain. Tedeschi only sold fuel at 15 of its 182 locations, which are all located in the Northeast. The deal will more than double 7-Eleven’s footprint in greater Boston and New Hampshire, where it currently operates and franchises 164 convenience stores.

CST Brands Inc./CrossAmerica Partners LP

CrossAmerica Partners LP, with partner CST Brands, entered into a definitive agreement to acquire the One Stop convenience-store chain based in Charleston, West Virginia. The transaction includes 41 company-operated One Stop convenience stores, four commission-agent sites, nine dealer fuel-supply agreements and one freestanding franchised quick-service restaurant. Of the 45 company-operated and commission agent sites, 30 are owned in fee. Five of the company-operated locations have quick-service restaurants. For the year ended Dec. 31, 2014, the aggregate 54 sites sold approximately 36 million gallons of motor fuel primarily under the Marathon and Exxon fuel brands, and had approximately $40.5 million in inside sales.

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