Lehigh Gas Partners Acquires 85 Stores

ALLENTOWN, Pa. -- Lehigh Gas Partners LP continues down its acquisition path, this time purchasing Petroleum Marketers Inc. (PMI). The deal, which closed April 30, carried a $61-million price tag and is the company's second acquisition in less than a month.

Roanoke, Va.-based PMI operates two primary lines of business: convenience stores and petroleum products distribution. Under its convenience store business, the company operates 85 stores and nine co-located, branded quick-service restaurants, primarily along the Interstate 81 corridor in Virginia, with a concentration in the Roanoke area, according to Lehigh Gas Partners.

For the 12-month period ended Dec. 31, PMI's c-stores sold 91 million gallons of motor fuel and generated $93 million in non-fuel revenue. The stores operate under the company's proprietary banner, Stop In Food Stores. 

Lehigh Gas Partners will initially operate the PMI convenience stores itself, but over time the company expects to transfer the operations of certain sites to third parties and to affiliate entities outside of the partnership.

PMI's petroleum products business distributes motor fuels and other petroleum products to customers throughout Virginia, West Virginia, Tennessee and North Carolina. For the 12-month period ended Dec. 31, the company distributed approximately 191 million gallons of petroleum products. 

As part of the deal, Lehigh Gas Partners divested the lubricants portion of the petroleum products distribution business upon closing for $14 million, which is reflected in the net total consideration for PMI of $61 million. The lubricants business was divested to an unrelated entity financed by Lehigh Gas Partners Chairman and CEO Joe Topper, with the intent to sell the business to an independent third party at a later date. 

"We are extremely excited about the acquisition of PMI," Topper said. "PMI adds materially to our presence in Virginia and complements our locations in Tennessee along the I-81 corridor. We expect to be able to realize material synergies as we integrate our operations."

This marked the second major deal in April for Lehigh Gas Partners. The partnership is acquiring BP-branded assets in Chicago and northwest Indiana from Atlas Oil Co. in a deal that includes 55 wholesale supply contracts, 11 fee or leasehold sites, two commission contracts and certain other assets. Lehigh Gas will pay $38.5 million for the transaction, which is expected to close this quarter, CSNews Online previously reported.

Formed in 2012, Allentown-based Lehigh Gas Partners distributes fuel to more than 1,100 locations and owns or leases more than 625 sites in 14 states: Pennsylvania, New Jersey, Ohio, Florida, New York, Massachusetts, Kentucky, New Hampshire, Maine, Tennessee, Maryland, Delaware, West Virginia and Virginia.  The company is affiliated with several major oil brands, including ExxonMobil, BP, Shell, Chevron, Sunoco, Valero, Gulf and CITGO.