CrossAmerica Inks Deal to Acquire Portfolio of Retail & Wholesale Assets

ALLENTOWN, Pa. — Months after turning its focus to its wholesale operations, CrossAmerica Partners LP is getting back into retail.

On Jan. 15, the Allentown-based partnership reached an agreement with entities affiliated with Joe Topper, chairman of CrossAmerica, to acquire the retail operations at 172 sites, wholesale fuel distribution to 114 sites, including 55 third-party wholesale dealer contracts, and a leasehold interest in at least 53 sites.

The purchase price for the assets is $36 million, with $21 million paid in cash and approximately 0.8 million newly issued CrossAmerica common units. The newly issued common units have a total equity value of approximately $15 million, according to CrossAmerica.

In addition, inventory will be purchased in cash at closing.

For the 12-month period ending Sep. 30, 2019, the retail operations to be acquired sold approximately 199 million gallons of motor fuel and had approximately $195 million in non-fuel revenue and the third-party wholesale assets to be acquired distributed 45 million gallons of motor fuel, CrossAmerica said.

"As an independent entity, it is important to have a retail capability and the retail sites being acquired are expected to immediately add value to the partnership. While our wholesale business will remain our focus, adding a retail capability provides us the strategic flexibility to maximize the value of our assets and to pursue a greater variety of acquisitions," said Charles Nifong, CEO and president of CrossAmerica.

The terms of the transaction were unanimously approved by the board of directors of the general partner of CrossAmerica following the unanimous approval and recommendation of its conflicts committee, comprised entirely of independent directors.

The conflicts committee engaged Evercore Group LLC as its financial advisor and Richards, Layton & Finger, P.A. as its legal advisor.

The transaction is subject to customary closing conditions and is expected to close in the second quarter of 2020.

The agreement comes two months after Alimentation Couche-Tard Inc. sold its ownership interest in CrossAmerica Partners to investment entities controlled by Topper, as Convenience Store News previously reported.

Formed in 2012, CrossAmerica Partners 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 31 states, it has relationships with several major oil brands, including ExxonMobil, BP, Shell, Chevron, Sunoco, Valero, Gulf, Citgo, Marathon and Phillips 66.