Sunoco LP Executes Two Deals to Grow Wholesale Fuels Business

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Sunoco LP Executes Two Deals to Grow Wholesale Fuels Business

01/18/2019
Sunoco LP

DALLAS — Sunoco LP kicked off the new year by with two acquisitions to support the growth of its wholesale fuels business.

On Jan. 18, Sunoco completed its purchase of Schmitt Sales Inc.'s wholesale fuel business. In addition, it executed a definitive agreement to acquire certain convenience stores from Speedway LLC.

Sunoco plans to convert the acquired c-stores to wholesale distribution sites.

Together, the acquired wholesale fuels businesses distribute approximately 180 million gallons of fuel annually across a network of dealer and commission agent-operated locations in the upstate New York, Ohio, Pennsylvania and West Virginia markets.

Matrix Capital Markets Group provided merger and acquisition services to Schmitt Sales, which included valuation advisory, marketing the business through a confidential, structured sale process and negotiation of the transaction.

Buffalo, N.Y.-based Schmitt Sales began operations in 1964 with a business model of installing fuel equipment at independent grocery stores in exchange for the right to distribute motor fuels and share related fuel profits. Peter Glor became company president in 2003 following the passing of founder Peter Schmitt Jr.

"The team at Schmitt Sales has done a tremendous job as we expanded our footprint in the Northeast through the leadership of Peter Glor. As we all know, this business can be unpredictable and challenging. The friendships that we have created not only with our customers, but colleagues in the industry, have added to the success that we have enjoyed," said Schmitt Sales CEO Maureen Schmitt. "I'd like to thank my dedicated team of employees for their hard work throughout the years. I'd also like to thank Matrix for their superior customer service and support through this entire process."

Total consideration for both acquisitions is approximately $50 million plus working capital adjustments, Sunoco said.

In addition to the acquisitions, Sunoco made a definitive asset purchase agreement with Attis Industries Inc. for the sale of Sunoco's ethanol plant in Fulton, N.Y. This includes the plant's grain malting operation.

Sunoco will enter into a 10-year ethanol offtake agreement with Attis as part of the deal. Total consideration for the divestiture is $29 million in cash. The sale is subject to regulatory clearances and customary closing conditions and is expected to close during the first quarter of 2019.

Dallas-based Sunoco is a master limited partnership that distributes motor fuel to approximately 9,200 convenience stores, independent dealers, commercial customers and distributors located in more than 30 states. Its general partner is owned by Energy Transfer Equity LP.