Pilot Flying Reportedly Pursuing Buyout of Equity Partner

KNOXVILLE, Tenn. — Pilot Flying J may be taking steps to buy out private equity partner CVC Capital Partners.

According to the Knoxville News Sentinel, the travel center operator is reportedly borrowing additional funds to provide a $750-million dividend to shareholders and pave the way for the buyout. The newspaper cited a Standard & Poor's report that said the new credit facilities for Pilot Travel Centers consist of a $1-billion revolver due in 2019, a $1.2-billion term loan also due in 2019, and a $2.25-billion term loan due in 2021.

Pilot Travel Centers does business as Pilot Flying J.

S&P said it expects that proceeds from the term loans and the $476 million in revolver borrowings would be used to refinance existing debt, make the dividend payment to shareholders and fund the partial redemption of CVC Capital Partners' stake in Pilot.

The private equity firm bought a 47.5-percent interest in Pilot in 2008. CVC later reduced its stake in Pilot to less than 20 percent.

Knoxville-based Pilot Flying J declined to comment on the S&P report, the newspaper reported.

According to the Knoxville News Sentinel, a Pilot Flying J spokeswoman previously said the Haslam family owned 59 percent of the company through an entity called Pilot Corp., and "other unaffiliated third parties" owned the other 41 percent.

A report filed in Kentucky indicated that other owners of the company include Chicago-based BDT Capital Partners; Miguel Loya of Houston; LS Squared LP of Rogers, Ark.; Brad Martin of Memphis, Tenn.; and Enterprise Investment Partners LP, also of Memphis.

Chris Stadler, a managing partner with CVC Capital, told the newspaper that CVC is selling half of its remaining stake in Pilot this month and the rest in 2017, as part of a strategy established two years ago. Stadler said Pilot will not be bringing another equity partner into the company.

He added that CVC's partnership with Pilot has been a "very favorable experience for us" and that the Haslam family treats their stakeholders well.

Pilot Flying J is made up of more than 600 locations of Pilot Travel Centers and Flying J Travel Plazas across the United States and Canada.

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