Susser To Buy Mid-Atlantic Convenience Stores From ETP For $768 Million

(RTTNews) - Susser Petroleum Partners LP (SUSP) and Energy Transfer Partners L.P. (ETP) on Thursday announced the first dropdown transaction between the two companies. In addition, Susser announced an agreement to acquire Hawaii-based Aloha Petroleum Ltd, closing of a new $1.25 billion revolving credit facility, and plan to change the Partnership's name to Sunoco LP.

Susser agreed to acquire Mid-Atlantic Convenience Stores LLC from ETP in a transaction valued at about $768 million. The consideration payable by Susser will consist of about 4 million of its newly issued common units and $556 million of cash, subject to customary closing adjustments.

Susser plans to initially finance the cash portion by utilizing availability under the revolving credit facility, with longer term financing through a combination of debt and equity.

The transaction is expected to be immediately accretive to distributable cash flow per unit for both Susser and ETP.

The assets owned by Mid-Atlantic Convenience Stores, LLC include the Mid-Atlantic Convenience Stores (MACS) locations and the Tigermarket locations that were previously acquired by ETP. Both businesses are currently operated and supplied by ETP's Sunoco subsidiary.

The dropdown will include about 110 company-operated retail convenience stores and 210 dealer-operated and consignment sites from the MACS/Tigermarket businesses.

Susser also agreed to acquire Honolulu, Hawaii-based Aloha Petroleum Ltd. Aloha Petroleum is the largest independent gasoline marketer and one of the largest convenience store operators in Hawaii, with an extensive wholesale fuel distribution network and six fuel storage terminals on the islands.

Aloha currently markets through about 100 Shell, Aloha, and Mahalo branded fuel stations throughout the state, about half of which are company operated. The base purchase price for Aloha is about $240 million, subject to a post-closing earn-out, certain closing adjustments, and before transaction costs and expenses.

Both transactions are expected to close in the fourth quarter of 2014.

Susser Petroleum Partners has closed a new revolving credit facility with a syndicate of banks that provides a base $1.25 billion revolving credit facility and includes an accordion feature that provides flexibility to increase the facility by an additional $250 million, subject to certain conditions. The facility matures in September 2019.

The expansion of the revolver from a current $400 million credit facility limit will allow the Partnership to finance dropdowns and acquisitions and provide significant liquidity for ongoing organic growth.

Susser also plans to change its name to Sunoco LP and its ticker symbol to SUN. The change in name and ticker symbol is intended to align the Partnership's legal and marketing name with that of ETP's iconic brand, Sunoco. The Partnership earlier traded under the SUN symbol on the New York Stock Exchange for almost 87 years until the sale of Sunoco to ETP in October 2012.