Erickson Oil Is Acquisition No. 2 for CrossAmerica
ALLENTOWN, Pa. and HUDSON, Wis. — CrossAmerica Partners LP (formerly Lehigh Gas Partners LP) announced its second acquisition since partnering with CST Brands Inc. just a couple of months ago. CrossAmerica will purchase all the outstanding shares of Erickson Oil Products Inc. and certain related assets for $85 million, subject to certain closing adjustments.
Allentown, Pa.-based CrossAmerica and Hudson-based Erickson Oil reported Wednesday in a news release that the companies entered into definitive agreements.
Erickson operates 64 convenience stores in Minnesota, Michigan, Wisconsin and South Dakota, with a concentration in the Minneapolis/St. Paul region. The stores operate primarily under Erickson’s own proprietary store brand, Freedom Valu.
Of the 64 store locations, 59 are owned fee simple, with the remaining sites being leaseholds. For the 12-month period ended Oct. 31, the stores sold approximately 68 million gallons of motor fuel and had approximately $95 million in non-fuel revenue.
CrossAmerica initially intends to operate the convenience stores within the partnership, but expects to transfer the operation of certain sites over time to CST Brands Inc., the parent company of its general partner. CST is one of the largest independent retailers of motor fuels and convenience merchandise in North America.
"We are delighted to acquire the high-quality Erickson portfolio, as well as to enter into a promising new market," said CrossAmerica President and CEO Joe Topper. "The Erickson family built a great organization with high-caliber employees and a strong work ethic. Along with our partners at CST, we expect to continue to grow the Erickson platform to further expand in the region.”
The transaction is expected to close during the first quarter of 2015. It is subject to customary closing conditions.
"This acquisition will enhance Erickson’s growth and competitiveness, and create new opportunities for our customers, employees and communities," added Gary Vander Vorst, president of Erickson.
Last month, CrossAmerica completed its first transaction with CST, buying 24 Nice N Easy Grocery Shoppes in upstate New York. Under the terms of that agreement, CrossAmerica acquired the real estate for the properties, as well as certain wholesale fuel supply related assets for $65 million. In turn, CrossAmerica is leasing both to CST under long-term agreements.
CrossAmerica is a leading wholesale distributor of motor fuels, and owner and lessee of real estate used in the retail distribution of motor fuels. Its general partner, CrossAmerica GP LLC, is a wholly owned subsidiary of CST Brands.
CrossAmerica distributes fuel to more than 1,100 locations and owns or leases more than 625 sites in 16 states: Pennsylvania, New Jersey, Ohio, Florida, New York, Massachusetts, Kentucky, New Hampshire, Maine, Tennessee, Maryland, Delaware, Illinois, Indiana, West Virginia and Virginia.