Valero Divesting Retail Business

Auction to sell convenience store sites expected to interest private equity firms, as well as c-store operators.

Valero Energy Corp. is selling its retail business, which is comprised of nearly 1,000 U.S. stores and some 775 units in Canada. The stores are being divested through an auction that could bring in more than $3.5 billion and is expected to draw private equity firms and c-store operators, Reuters reported.

Valero’s retail business is estimated bring in $450 million in annual earnings before interest, tax, depreciation and amortization (EBITDA) and could sell for around eight times EBITDA ($3.5 billion), according to Reuters.

The U.S. refining company had announced plans in July to split off its gas station and convenience stores, and cited a tax-free spinoff to shareholders as one of the options. Credit Suisse Group is advising Valero on the retail split.

Big private equity firms, including TPG Capital LP and Carlyle Group LP, are among the parties that are taking an initial look, and large convenient store chains such as Alimentation Couche-Tard Inc. or 7-Eleven would also likely have some interest, according to people familiar with the matter.

It is not yet clear if the U.S. and Canadian operations would be sold as a whole or separately.




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