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08/25/2022

CrossAmerica Makes Deal for Assets From Community Service Stations

The transaction includes fuel supply contracts for roughly 75 million gallons annually.
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CrossAmerica Partners

ALLENTOWN, Pa. — CrossAmerica Partners LP entered into a definitive agreement to acquire certain assets of Community Service Stations Inc.

As part of the deal, CrossAmerica will pick up wholesale fuel supply contracts to 39 dealer-owned locations, 34 subjobber accounts and two commission sites, one fee based and one lease.

The supply contracts include approximately 75 million gallons of fuel annually through brands including Exxon Mobil, Shell and Gulf.

"We are excited to acquire these attractive assets from one of the leading wholesale distributors in the Boston area," said CrossAmerica Partners President and CEO Charles Nifong. "This acquisition expands our fuels business in the New England market with new dealers and strengthens our relationship with several of our major fuel supplier partners."

Boston-based Community Service Stations was founded in 1918 by George Riley Sr. and a partner. Riley's son and grandson, George and Chris, have subsequently managed the company.

Terms of the transaction were approved by the board of directors of the general partner of CrossAmerica. The acquisition is subject to customary conditions to closing. 

CrossAmerica anticipates financing the acquisition with cash on hand and/or undrawn capacity under the limited partnership's revolving credit facility. The company expects the acquisition to be immediately accretive to distributable cash flow to limited partners.

The deal is expected to close during the fourth quarter.

Matrix Capital Markets Group Inc. served as the exclusive financial advisor to Community Service Stations.

Another Deal in the Books

The deal for certain assets of Community Service Stations is the latest merger-and-acquisition move from CrossAmerica Partners. Last spring, the limited partnership picked up 106 company-operated convenience stores from Irving, Texas-based 7-Eleven Inc.

The sites were included in 7-Eleven's divestiture process in connection with its acquisition of Speedway LLC from Findlay, Ohio-based Marathon Petroleum Corp. The vast majority of the sites were operating under the Speedway brand.

Nearly all of the sites acquired from 7-Eleven have been rebranded, CrossAmerica Partners Chief Financial Officer Maura Topper said during the partnership's second quarter 2022 earnings call earlier this month.

The addition of those stores increased CrossAmerica's average company-operated site count from 150 to 254, a 69 percent jump, according to the partnership.

Allentown-based CrossAmerica Partners LP is a leading wholesale distributor of motor fuels, convenience store operator, and owner and lessee of real estate used in the retail distribution of motor fuels. Its general partner, CrossAmerica GP LLC, is indirectly owned and controlled by entities affiliated with Joseph V. Topper Jr., the founder of CrossAmerica Partners and a member of the board of the general partner since 2012.

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 1,750 locations and owns or leases approximately 1,150 sites. Its footprint covers 34 states.