WESTLAKE, Ohio — The first blockbuster acquisition of 2023 is here. BP is acquiring TravelCenters of America Inc. (TA) in a deal valued at approximately $1.3 billion.
According to TA, BP will purchase the outstanding shares of TA common stock for $86 per share in cash. The sale price represents an 84 percent premium to the average trading price of the 30 days ended Feb. 15 of $46.68.
"Today's announcement that BP is acquiring TA for $86 per share is a result of the successful implementation of our turnaround and strategic plans," said TA CEO Jonathan M. Pertchik. "We have improved our core travel center business, expanded our network, launched eTA to prepare for the future of alternative fuels and improved our operating and financial results, none of which we could have accomplished without the hard work and dedication of our employees at every level."
TA's strategically located network of highway sites complements its existing predominantly off-highway convenience and mobility business, enabling TA and BP to offer fleets a seamless nationwide service, according to BP.
In addition, BP's global scale and reach will, over time, bring advantages in fuel and biofuel supply, as well as convenience offers for consumers. It will provide options to expand and develop new mobility offers including electric vehicle (EV) charging, biofuels, renewable natural gas (RNG) and later, hydrogen, both for passenger vehicles and fleets.
Convenience is one of BP's five strategic transition growth engines in which it aims to significantly grow investment through this decade. By 2030, the company aims for around half of its annual investment to go into these transition growth engines. From 2023 to 2030 it aims that around half of its cumulative $55 billion to $65 billion transition growth engine investment will go into convenience, bioenergy and EV charging.
"This is BP's strategy in action. We are doing exactly what we said we would, leaning into our transition growth engines. This deal will grow our convenience and mobility footprint across the U.S. and grow earnings with attractive returns," said BP CEO Bernard Looney. "Over time, it will allow us to advance four of our five strategic transition growth engines. By enabling growth in EV charging, biofuels and RNG and later hydrogen, we can help our customers decarbonize their fleets. It's a compelling combination."
The agreement is the culmination of a comprehensive process by TA's board of directors. Following the implementation of TA's turnaround plan and several quarters of improved operating performance, BP received unsolicited interest to acquire the company. In response, TA's board hired financial and legal advisors as part of a formal process to consider a potential sale of the company. This process ultimately included competitive rounds of bidding from potential buyers that resulted in the transaction announced Feb. 16, according to TA.
A condition of the sale is the approval by shareholders who own a majority of TA's shares outstanding. Service Properties Trust, which owns 7.8 percent of TA's shares outstanding, and The RMR Group, which owns 4.1 percent of TA's shares outstanding, both have agreed to vote their shares in favor of the sale.
At the closing of the transaction, TA will terminate its management agreement with RMR pursuant to the terms of the agreement and pay a termination fee to RMR that is currently estimated to be approximately $44 million.
Subject to shareholder and regulatory approval, the parties are targeting closing the acquisition by mid-year 2023.
The transaction was unanimously approved by TA's board. Citigroup acted as exclusive financial advisor to TA and Ropes & Gray as TA's legal advisor in connection with the transaction.
"Subject to approvals, we look forward to welcoming the TA team to BP. TA's amazing nationwide network of on-highway locations combined with BP's more than 8,000 off-highway locations have the potential to offer travelers and professional drivers a seamless experience for decades to come," said Dave Lawler, chairman and president of BP America.
Westlake-based TravelCenters of America Inc. is the nation's largest publicly traded full-service travel center network. Founded in 1972, its more than 18,000 team members serve guests in 281 locations in 44 states, principally under the TA, Petro Stopping Centers and TA Express brands. Offerings include diesel and gasoline fuel, truck maintenance and repair, full-service and quick-service restaurants, travel stores, car and truck parking, and other services dedicated to providing great experiences for its guests.
TA is committed to sustainability, with its specialized business unit, eTA, focused on sustainable energy options for professional drivers and motorists.
The operator has more than 600 full-service and quick-service restaurants and nine proprietary brands, including Iron Skillet and Country Pride.