Global Partners to Double C-store Footprint
WALTHAM, Mass. — Global Partners LP has been busy the past 15 months and there are no signs of letting up, with its Warren Equities acquisition set to close early next year.
In October, Global Partners announced its subsidiary Global Montello Group Corp. is acquiring 100 percent of the equity interest in Warren Equities Inc., one of the largest independent marketers of petroleum products in the Northeast, for approximately $383 million, as CSNews Online previously reported.
Based in Providence, R.I., Warren Equities operates 147 Xtra Mart convenience stores, markets fuel through 53 commissioned agent locations and supplies fuel to approximately 320 dealers. Warren operates in 10 states: Massachusetts, Connecticut, Maine, New Hampshire, New York, Rhode Island, New Jersey, Pennsylvania, Maryland and Virginia.
"We believe this is a great acquisition for the partnership, increasing our retail presence throughout the Northeast and expanding our footprint into the adjacent Mid-Atlantic region," Global Partners President and CEO Eric Slifka said during a third-quarter earnings call Thursday morning.
The Warren Equities assets will add approximately 500 million gallons of fuel to Global Partners' network, increase the total number of its retail sites from approximately 900 to more than 1,500, and more than double Global-operated convenience stores from approximately 120 to 267, Slifka explained.
Global Partners received approval for early termination of the Hart-Scott-Rodino Antitrust Improvements Act waiting period, which gives it "the green light to move forward from a federal regulatory perspective," the chief executive said.
In addition to the Warren Equities purchase, Global Partners has rebuilt and/or renovated and reopened 20 convenience stores over the past 15 months, including nine on the Connecticut Turnpike. Global Partners also launched four new-to-industry locations: two in Connecticut and two in Massachusetts.
The Waltham-based company strengthened its cash flow as well from 11 newly acquired c-store commissioned agent locations on the Massachusetts Turnpike and several ground lease sites, according to Slifka.
"We are combining these efforts with merchandising strategies, programs and other initiatives to enhance the overall consumer experience at our sites, driving additional traffic and increasing gasoline and sundries sales," he noted.
Looking at Global Partners' third quarter by the numbers, net income attributable to Global Partners for the quarter was $42.5 million, compared with $25.8 million for the third quarter of 2013.
Combined product margin for the third quarter was $170.3 million, compared to $133.5 million for the third quarter of 2013. EBITDA for the third quarter of 2014 was $74.7 million, compared to $58.5 million for the same period in 2013.
"Global Partners reported strong financial results in the third quarter reflecting margin increases in all three segments," Slifka said, adding that one of the strategic themes for Global Partners is the optimization created by the integration of its three segments.
"Through organic projects and [merger and acquisition activity], we have established a portfolio of high-quality, vertically integrated assets that position us to achieve success in ever-changing market conditions," Slifka concluded.