Convenience Store News

MAR 2017

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30 Convenience Store News | MARCH 2017 | WWW.CSNEWS.COM merged company was excited to grow its retail operations on the heels of a tremendous second quarter in the division. But then, in a turn of events, Western Refining found itself an acquisition target. In November, Tesoro Corp. finalized a definitive agree- ment to acquire Western Refining for $4.1 billion. The move will create a leading multi-brand marketing and convenience store portfolio in growing geographies with more than 3,000 combined branded retail sites. Western Refining declined to speak to CSNews about its 2016 growth or its future under Tesoro, cit- ing the pending deal. The transaction is on pace to close in the first half of this year. The quick turnaround of Western Refining from buyer to seller did not really take convenience channel merger and acquisition (M&A) experts by surprise. As Dennis Ruben, executive managing director of NRC Realty & Capital Advisors LLC, explained, Tesoro has been on an acquisition course since buying the retail assets of BP — a deal that closed in 2013. "Tesoro has been the exception to the rule. Most of the oil companies have been on a divesture kick over the past several years, but Tesoro has been one of the exceptions that has been acquisitive," Ruben said. Terry Monroe, founder and president of American Business Brokers & Advisors, added that "in the world of mergers and acquisitions, especially when dealing with publicly traded companies, their main focus is increasing shareholder value for their stockholders." He pointed to the pending sale of CST Brands Inc. to Couche-Tard, and Marathon Petroleum Corp. launching a strategic review of Speedway. "Whenever No.1 Western Refining Inc. El Paso, Texas 2017 Store Count: 542 2016 Store Count: 247 Increase: 295 (119.4%) About the company's growth: Western Refining more than doubled its presence in the convenience channel last year, largely due to its acquisition of Northern Tier Energy LP in late June. The transaction added 170 Midwest convenience stores, primarily under the SuperAmerica banner, to Western Refining's 230 Giant, Mustang, Sundial and Howdy's stores in the Southwest. Northern Tier also supported 114 franchised locations primar- ily in Minnesota and Wisconsin under the SuperAmerica trademark. Western Refining now finds itself on the other end of the equa- tion: Tesoro Corp. is set to close its acquisi- tion of the company in the first half of 2017. ••••••••••••••• No. 2 GPM Investments LLC Richmond, Va. 2017 Store Count: 849 2016 Store Count: 672 Increase: 177 (26.3%) About the company's growth: GPM con- tinues to take the convenience channel by storm, scooping up one regional chain at a time. In 2016, the company closed on several small and mid-sized deals, including 137 convenience stores with fuel and 33 dis- count tobacco shops in Michigan and Indiana from Admiral Petroleum Co.; the purchase of nearly 70 Apple Market locations in Virginia and Kentucky from Fuel USA LLC; and acquir- ing 17 locations in Illinois and Missouri from Jiffi Stop Stores. ••••••••••••••• No. 3 Sunoco LP Dallas 2017 Store Count: 2,998 2016 Store Count: 2,875 Increase: 123 (4.3%) About the company's growth: Sunoco LP, through wholly owned subsidiar- ies, completed the acquisitions of 18 Valentine Stores locations in upstate New York from Valentine Stores Inc.; and 14 Rattlers c-stores and wholesale fuel sup- ply contracts from Navasota, Texas-based Kolkhorst Petroleum Inc. Sunoco LP then followed these moves by purchasing the c-store assets and wholesale fuel busi- ness of Nacogdoches, Texas-based Denny Oil for approximately $53 million. The deal included Denny Oil's Check Point chain that operates throughout East Texas and West Louisiana, its network of company-owned and dealer-operated convenience stores, a commercial fuels and lubricants business, and 126 dealer accounts to which the com- pany supplied branded and unbranded fuel. ••••••••••••••• No. 4 CST Brands Inc. San Antonio 2017 Store Count: 1,167 2016 Store Count: 1,049 Increase: 118 (11.2%) About the company's growth: CST Brands began 2016 by closing on its planned acqui- sition of the Flash Foods retail network from cover story Couche-Tard, 2016's Top Growth Chain, added 1,510 stores just on its own — more than all of this year's growth chains combined.

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