CrossAmerica Completes Transition to Sole Focus on Wholesale Operations
ALLENTOWN, Pa. — CrossAmerica Partners LP closed on its agreement with Applegreen plc through which Applegreen will operate 46 company-operated retail stores in the Upper Midwest.
CrossAmerica will retain the sites and has entered into master fuel supply and master lease contracts with Applegreen. Following the completion of the transaction, CrossAmerica is now solely focused on its wholesale operations.
"This is a significant milestone to simplify our business focusing on our strengths, and expanding our collaboration with a world-class convenience retail operator to continue to deliver value to our customers and unitholders," stated Gerardo Valencia, CEO and President of CrossAmerica.
CrossAmerica and Applegreen reached the deal for the Upper Midwest stores in June, as Convenience Store News reported. It followed a previous agreement for Dublin, Ireland-based Applegreen to operate 43 locations in Florida. Prior to that deal, Applegreen operated 20-plus sites for CrossAmerica in the Northeast.
During CrossAmerica's second-quarter earnings call on Aug. 6, Valencia expressed confidence in the company's future goals and preparation to exit direct retail operations.
"We are very excited to expand our relationship with [Applegreen]," Valencia said during the call. "They are a very strong operator and we expect to finish the year with over 100 sites by the end of 2019."
CrossAmerica stated that it expects the transaction to be accretive to distributable cash flow to its limited partners, and it will provide further details with its third-quarter 2019 earnings report.
Applegreen is a convenience food and beverage retailer and operator of petrol forecourts and motorway service areas with a major presence in Ireland, the United Kingdom and the United States.
Allentown-based CrossAmerica is a wholesale distributor of motor fuels and owner and lessee of real estate used in the retail distribution of motor fuels. Formed in 2012, CrossAmerica Partners LP is a distributor of branded and unbranded petroleum for motor vehicles in the United States and distributes fuel to approximately 1,300 locations and owns or leases more than 1,000 sites. With a geographic footprint covering 34 states, the partnership has relationships with several major oil brands, including ExxonMobil, BP, Shell, Chevron, Sunoco, Valero, Gulf, CITGO, Marathon and Phillips 66.