CST Brands Exiting California & Wyoming
SAN ANTONIO — CST Brands Inc. and 7-Eleven Inc. are trading assets to the tune of $408 million.
San Antonio-based CST announced Thursday that it entered into a definitive agreement to sell its store operations in the California and Wyoming markets to 7-Eleven Inc. and its wholly owned subsidiary SEI Fuel Services Inc. The transaction includes 76 stores in California and three stores in Wyoming.
The transaction, which carries a $408-million price tag, is subject to customary closing conditions, including possible purchase price adjustments at the time of close. The cash deal is expected to close mid-summer; however, there is no assurance that a transaction will be completed, according to CST.
"These have been great-performing stores, which is a tribute to our hardworking, dedicated employees," said Kim Lubel, chairman, president and CEO of CST. "This is a tremendous opportunity for the right buyer and we look forward to working with 7-Eleven to close this transaction."
Upon closing, CST expects to realize a tax benefit from the completion of a like kind exchange strategy with its purchase of properties that were acquired in Georgia and Florida as part of the Flash Foods network.
This agreement with 7-Eleven comes two months after CST announced it was beginning the process of conducting a full exploration of strategic alternatives to further enhance stockholder value. CST formed a special committee of independent directors to oversee the process. These moves were made in the midst of public stockholder unrest, as CSNews Online previously reported.
CST is one of the largest independent retailers of motor fuels and convenience merchandise in North America. It employs more than 14,000 people at more than 2,000 locations throughout the Southwestern United States, Georgia, Florida, New York and Eastern Canada. CST also owns the general partner of CrossAmerica Partners LP, a master limited partnership and wholesale distributor of fuels, based in Allentown, Pa.
Irving, Texas-based 7- Eleven operates, franchises and licenses more than 10,700 stores in the United States and Canada. Globally, nearly 60,000 7-Eleven stores, operating in 17 countries, serve over 44 million customers daily.
Raymond James advised CST in this transaction.