WALTHAM, Mass. -- Global Partners LP’s Global Montello Group Corp. subsidiary entered into a definitive agreement to acquire 100 percent of the equity interest in Warren Equities Inc., one of the largest independent marketers of petroleum products in the Northeast.
Warren sells approximately 500 million gallons of fuel annually through roughly 520 retail locations. Based in Providence, R.I., the company 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. In addition to its proprietary Xtra Fuels brand, the company markets fuel through several major brands, including Exxon, Mobil, Shell, BP, Sunoco, CITGO, Gulf and Valero.
“Warren’s portfolio of Northeast retail sites is an excellent strategic fit that complements our existing footprint in the region,” said Eric Slifka, Global Partners' president and CEO. “This transaction provides a platform for Global to expand into the Mid-Atlantic region, and leverage our expertise to drive customer traffic and store profitability throughout the network.”
The total consideration of the agreement is approximately $383 million, subject to closing adjustments.
“By leveraging our infrastructure as well as our expertise in fuel sourcing, merchandising and other areas, we believe we can optimize value throughout the c-store, retail/wholesale gasoline and operating functions,” Slifka stated. Based on his company’s analysis of the sites and the significant synergies anticipated as a result of the transaction, “we believe we will substantially improve the performance relative to Warren’s historical results,” he added.
Global Partners expects to generate EBITDA of between $50 million and $60 million in the second full year of operations.
“This transaction is the right strategic step for our company,” said Herb Kaplan, Warren’s chairman. “Global’s acquisition will enable Warren to become part of an established, growing and financially strong master limited partnership that is recognized as a leader in fuel distribution and retail asset development.”
Closing is expected in the first quarter of 2015, subject to customary closing conditions and regulatory approvals.