Lehigh Gas Partners Acquires 34 Stations From Rocky Top Markets

The newly-acquired sites are located in the Knoxville, Tenn. region.

Lehigh Gas Partners LP has entered into an asset purchase agreement with Rocky Top Markets LLC and Rocky Top Properties LLC to purchase 30 motor fuel stations, and enter into leases for four motor fuel stations, assume seven third party supply contracts and purchase certain equipment and other assets at the sites for a total consideration of $36.9 million.

Lehigh Gas Partners is expected to pay $10.7 million at closing for one fee property site, the four leasehold sites, the seven third party supply contracts and certain other equipment and assets associated with the sites.

At the time of the closing,  Lehigh Gas Partners will enter into a master lease for the remaining 29 motor fuel stations. On or after Aug. 1, 2015, Lehigh Gas Partners will purchase the 29 motor fuel stations for $26.2 million, the remaining balance of the purchase price.

The transaction enhances Lehigh Gas Partners’ geographic diversity and provides it access to a new market region. The 34 sites are located in and around the Knoxville, Tenn. region and along Interstate 40 and 75. In aggregate, including the assumed third party supply contracts, the total portfolio sold 34.1 million gallons of motor fuel in 2012. Thirty-one of the 34 sites are Shell branded.

“We are extremely excited to enter into the Knoxville market and to establish a presence in Tennessee,” said Chairman and CEO Joe Topper. “We are pleased to be able to acquire assets of the quality of Rocky Top and to add to our Shell portfolio. The acquisition provides us a solid platform in the region that we hope to grow over time,” Topper added.

Steve Kirkham, owner of Rocky Top Markets, was unavailable for comment at presstime.

Lehigh Gas Partners has agreed to lease or sublease the 34 sites in a 15 year agreement to Lehigh Gas-Ohio LLC (LGO), which separately agreed to purchase fuel and merchandise inventory and certain other assets at the sites from Rocky Top. The Partnership will also supply fuel to LGO at these sites under a 15-year agreement.

The transaction is scheduled to close during the third quarter of 2013. Lehigh Gas Partners expects to fund the transaction through funds available under its corporate credit facility.



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