A New Industry Player in the Making

MYRTLE BEACH, S.C. -- Pete Iodice is hoping to hit the trifecta. The industry veteran, who has already successfully taken two convenience store companies public, recently founded Travel Center Partners Inc., a new venture with a plan to own more than 50 independent c-stores and be publicly traded on the NASDAQ small market capitalization exchange.

Iodice, who serves as CEO of the new company, and Robert Nash, its vice president of investor relations, granted CSNews Online an exclusive industry interview to talk about their goals, how the company will be comprised and more. Iodice worked for a large c-store chain following his 1973 graduation from the University of Georgia. He previously took two companies public, which were later sold to larger convenience store groups.

His latest business, Travel Center Partners, will be a subsidiary of a holdings company and will primarily be engaged in the purchase and management of independent convenience stores.

According to Iodice, Travel Center Partners is now in negotiations to acquire several independent c-stores located in the southeastern part of the country. The locations being acquired will be announced after its S-1 documents have been approved by the Securities and Exchange Commission and when the company goes public.

"We filed the S-1. We're in the second round of comments. Those should be answered sometime in August," Iodice said. “We're hoping to have everything become official by late September or early October. We will 'close' right after the S-1 becomes effective. That way, we can officially purchase the stores."

The company intends to expand and own more than 50 convenience stores in the near future. "Our plan is to continue to grow," Iodice said. "We don't have a number of stores we will cap out at."

Travel Center Partners is looking for individuals to review its S-1 and perhaps become an equity owner. The Myrtle Beach, S.C., company is also seeking the right store owners who are interested in selling their businesses to the new company. That's how Travel Center Partners plans to grow, in addition to opening new stores.

"I'm always looking for stores. We can offer an equity transaction after the S-1 is complete," said Iodice. "The initial transactions are all involving cash and debt. But, if the seller wants equity, we can do that after the S-1 is complete."

Purchasing existing independent c-stores has many advantages. For instance, few changes are needed and the store already has an established customer base. As for motor fuel, Iodice said he has a good relationship with Valero Energy Corp., and expects to brand the stores with the San Antonio-based petroleum company.

Regarding foodservice, Iodice said two of the stores Travel Center Partners are set to purchase already have restaurants. "It is my goal to co-brand with another national food operation," he noted.

For those c-stores that have chosen or will choose to be under the Travel Center Partners umbrella, Iodice stressed that the retail locations will not become franchises. "Those stores will instead be acquired by our company," Iodice explained. "We will own them. Once we acquire the stores, however, we immediately work to lease the stores out to a new store operator. We will have very few company-operated stores."

The locations are expected to operate under the EZ Marts and Check N Go Food Stores banners. Although, generic corporate advertising may also support the stores. "But we're not going to make a deal with a [big beverage company] and insist all of our stores sell their products," Iodice said. "As long as the terms of the lease are met, we will not get involved in any way with the operation."

When building or remodeling stores, Travel Center Partners does plan to focus on green sustainability. "That's something that was not considered 10 or 20 years ago," Nash told CSNews Online. “Also, this third corporation is anticipated to be much larger than the previous two corporations that were sold. We have already started looking at acquisitions for c-stores and truck stops. This, we anticipate, will enhance our company value."

"We are open-minded and optimistic when acquiring any other types of companies that show promising services or products -- companies that are either existing with strong profit potential or would have encouraging growth with our expertise and experienced business leadership," added Iodice. "There is no set goal of companies that may be acquired, but only to anticipate the increased value of the corporation."

Making the Sale

Once an independent c-store owner sells his or her business to Travel Center Partners, they will walk out with a check and no further ties to the business. The company will then perform various housekeeping, updating and re-branding tasks. "We will operate it as a company store until we find a lessee, who is required to sign a 10-year lease with us to operate the business. The only thing we do, other than owning the property, is we maintain a long-term fuel supply agreement, which is a key factor within our business model," Iodice said.

It is certainly possible the former c-store owner who just sold their store could become the lessee. No matter who it is, they have decision-making power on most everything except for who the petroleum provider is, Iodice said. "In order for a lessee to 'get into' a property, they have to do three things. First, they need to execute a 10-year lease with us. Second, they need to pay us a 'goodwill payment' to get into the store. Third, they buy the fuel from us."

Even though a new lessee doesn't have authority regarding motor fuel, Iodice said Travel Center Partners has a plan to make that work out in the lessee's favor. "Being able to provide fuel for all of the stores, we can give them a competitive price," he said. "We can also provide a competitive shipping price for their location."

Taking Stock

Travel Center Partners currently has 100 million shares authorized. When multiplying the offer price of 2 cents per share by the number of shares, you would conclude Iodice and Nash are valuing the entire company at $2 million. However, both men told CSNews Online that figure only values the "shell" company; it does not value the stores to be acquired.

"We're selling our stock now at a fraction of what the true value will be," said Iodice. "As soon as we start to make the acquisitions, we anticipate an increased value for the corporation. There's a big upside opportunity for investors. Of course, once the stock is traded publicly, the market determines our stock price and we have no control over it."

Having already sold two corporations for a healthy return, Iodice said he will certainly consider doing the same sometime in the future for this new company.

"Our industry is notorious for consolidation," he said. "I would hope a [larger chain purchasing us] would happen again. We will position the company with that in mind. We will make management decisions that will make us attractive to someone larger. But that's not going to be what we think about every day when we wake up."

According to Nash, an executive at a "blue chip" company will be named the holding company’s president in the near future. He will remain unnamed until a non-compete stipulation is satisfied, which is set to take place at the end of August. Iodice's son Chris will also join the management team, along with an in-house council for compliance matters.

To receive information about Travel Center Partners’ S-1 filing, or if you have interest in selling an independent convenience store to the company, contact Robert Nash at (315) 652-2274.

Editor's Note: Convenience Store News neither recommends nor discourages the purchase of the stock presented in this story. Travel Center Partners said this article may contain forward-looking statements.