Susser Holdings Corp. (SUSS) and Susser Petroleum Partners LP (SUSP) announced that SUSS has completed the acquisition of Gainesville Fuels Inc., which operates a wholesale fuel and lubricants distribution business selling approximately 60 million gallons of diesel annually to oil and gas producers in northern Texas and southern Oklahoma. SUSS will contribute the acquired company to SUSP.
“We would like to extend a warm welcome to the employees and customers of Gainesville Fuel. The Gainesville acquisition gives us access to new geographic wholesale markets in North Texas and Southern Oklahoma,” said Sam Susser, president and CEO of Susser Holdings. Susser Holdings Corp. is a third-generation family led business based in Corpus Christi, Texas that operates approximately 570 convenience stores in Texas, New Mexico and Oklahoma under the Stripes banner.
“By combining the Gainesville business with our existing commercial fuels business serving customers in the Permian basin, we expect to realize operating and procurement synergies. We also have the opportunity to expand sales to existing customers in these new service areas,” Susser said.
Management expects that the contribution of the company to SUSP will occur within the next few days. In connection with this value-for-value exchange, SUSP will assume Gainesville’s existing indebtedness and certain other liabilities, and will issue $2.0 million in SUSP common units to SUSS. SUSS expects to immediately record a one-time non-cash deferred tax charge of approximately $3.6 million arising from the contribution of goodwill from a taxable entity (SUSS) to a non-taxable entity (SUSP) in connection with this transaction.
Beginning in 2014, the acquisition is expected to generate annual incremental distributable cash flow for SUSP of $0.05 to $0.10 per common unit, and approximately $0.03 to $0.07 of incremental earnings per common share for SUSS, excluding any synergies.
Raymond James & Associates, Inc. acted as advisor for Gainesville Fuels in this transaction.
New Locations Update
Susser Holdings has opened six new large-format Stripes convenience stores to date during the third quarter, bringing the total new store builds for the year-to-date to 16. SUSP completed a $13.3 purchase and leaseback transaction for four Stripes stores in late August and also purchased one additional site from SUSS, which will be leased to an independent operator in its fuel distribution business. Since its initial public offering in September 2012, SUSP has completed the purchase and leaseback of 26 Stripes stores for a cumulative cost of $103.0 million, including post-completion true-up.