Refuel Considering Possible Sale
CHARLESTON, S.C. — Refuel Operating Co. LLC could be getting a for-sale sign.
Private equity firm First Reserve, which acquired Refuel in 2019, is exploring strategic options, including a potential sale that could value the convenience store operator at more than $1.5 billion including debt, people familiar with the matter told Reuters.
Charleston-based Refuel operates more than 220 c-stores across South Carolina, North Carolina, Texas, Mississippi and Arkansas, and has more than 3,000 employees.
According to the sources, First Reserve is in talks with investment bankers to launch a sale process for Refuel in the first half of 2025. Potential buyers include other store operators and buyout firms.
Refuel's Charted Growth
Based on comparable transactions in the sector, Refuel could command a valuation equivalent to about 13 times its core annual earnings of roughly $120 million, the sources said, cautioning a deal is not guaranteed and First Reserve may keep the business.
First Reserve and Refuel declined to comment.
Under the ownership of First Reserve, which mainly focuses on investing in the energy sector, Refuel has grown through acquisitions of other store operators and family-owned convenience stores.
In January 2022, First Reserve said it had moved its Refuel investment into a continuation fund, which allows buyout firms to continue owning an asset beyond its traditional lifespan. This structure also allowed Refuel to attract funding from new investors.
Refuel's deliberations on a potential sale mirror recent moves from other c-store operators. In September, anonymous inside sources said ARKO Corp. could be making plans to exit the convenience store industry by divesting its retail operations in a deal that could be valued at $2 billion. The company is working with investment bankers at Citigroup to sell its portfolio of 1,500-plus stores. Such a move would reverse course on multiple years of expansion, which included a 2023 attempt to beat out bp to acquire TravelCenters of America, following a slowdown in c-store sales, as Convenience Store News previously reported.