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Wednesday, October 7, 2015

Insider’s View: Q3 2015 M&A Review
Strong demand remains for c-store assets, but downward pressure may be coming on purchase prices

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

SCOTTSDALE, Ariz. — Although the third quarter of 2015 was relatively quiet in terms of new merger-and-acquisition activity in the convenience-store industry, there were a few notable transactions by some of the major industry players, such as Circle K, Sunoco and TravelCenters of America.

In addition, Westex Capital LTD completed the sale of all of its convenience stores and its fuel and propane distribution business. The fourth quarter is historically the busiest quarter in terms of M&A activity, as both buyers and sellers try to complete or at least sign deals before the end of the year. We are aware of several transactions that should be announced later in the year. Most importantly, there continues to be very strong demand for quality companies and portfolios of convenience-store assets.

7-Eleven Inc.

SEI Fuel Services Inc., an affiliate of 7-Eleven Inc., announced the purchase of the dealer fuel supply business of LavigneBaker Petroleum LLC in and around New Orleans. Since 2012, SEI Fuel has purchased four other wholesale businesses and now sells more than 600 million gallons of fuel annually to open dealers. With this transaction, SEI Fuel enters the New Orleans market as the largest Shell-branded distributor, supplying approximately 60 branded locations.

In July, 7-Eleven announced that it was selling 25 gas stations and convenience stores in 10 states. The company felt the stores did not fit its current business model. All of the sites are operational, and 16 of the sites are convenience stores with gas, while nine do not offer fuel.  NRC Realty & Capital Advisors, LLC was engaged by 7-Eleven to coordinate the sale.

In August, 7-Eleven closed on the sale of Rockland, Massachusetts-based Tedeschi Food Shops and its approximately 180 convenience stores. A 7-Eleven spokesperson said that a rebranding of the Tedeschi locations to 7-Eleven will be gradual, and, for now, the stores will continue to operate as Tedeschi Food Shops. However, 7-Eleven intends to remodel and rebrand several stores later this year.

CST Brands Inc./CrossAmerica Partners LP

CST Brands Inc. and CrossAmerica Partners LP announced the closing of dropdown transactions between the two companies that involved the acquisitions of the real property associated with 29 new-to-industry stores (NTIs) and an additional 12.5% interest in CST Fuel Supply LP for aggregate consideration of $142 million in cash and 3.6 million newly issued common units representing limited partner interest