SuperAmerica Spinoff Complete

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SuperAmerica Spinoff Complete


RIDGEFIELD, Conn. -- The initial public offering (IPO) of Northern Tier Energy LLC's downstream division -- called Northern Tier Energy LP -- closed on July 31, the company announced today.

The IPO, structured as a master limited partnership (MLP), consists of Northern Tier's SuperAmerica convenience store retail division and its refining segment.

Northern Tier sold 18.687 million shares for $14 per share on the New York Stock Exchange. The company reported today that the $245 million it received in net proceeds from the IPO, as well as $57 million in cash previously on the company's balance sheet, is being used to redeem senior secured notes; pay for derivative contract losses; and $40 million will go to former Speedway LLC parent Marathon Oil Corp., thus ending its minority ownership in Northern Tier Energy LLC.

Now that Northern Tier Energy LP is a public company, SuperAmerica's quarterly earnings as a standalone company were revealed to the public today for the first time. The chain, which operates 166 c-stores primarily in Wisconsin and Minnesota plus an additional 67 locations branded under the SuperAmerica name, earned a net profit of $4.8 million for its fiscal second quarter ended June 30. That number is essentially flat compared to the $4.7 million net profit the company -- also owner of the SuperMom's bakery and commissary -- earned in its 2011 second quarter.

According to Northern Tier Energy LP, fuel gallons sold at its company-operated c-stores declined by 5.8 percent during this latest quarter vs. last year. However, high non-fuel revenues, driven primarily by merchandise sales, in effect canceled out the weaker fuel gallon sales.

When asked during today's earnings conference call to discuss possible merger and acquisition possibilities for its retail division, Northern Tier Energy LP CEO Mario Rodriguez responded, "We continue to review opportunities. We continue to be diligent."

However, the chief executive said he couldn't comment any further about the topic.

As for companywide results, Northern Tier Energy LLC reported a net income of $246.6 million for its latest quarter, compared to a loss of $42.1 million in its 2011 fiscal second quarter. The reported quarterly results cover the period from April 1 to June 30. Hence, the now-spun off refining division's profits were included in the $246.6 million figure because the spinoff did not take place until a month after the reporting period ended.

Northern Tier Energy LLC credited improved results in its now-spun off refining division for much of the improved profits.

"It's the strongest quarterly performance we have had since the company was founded in 2010," Rodriguez noted.

Northern Tier was created in 2010 after TPG Capital and ACON Investments purchased the majority of Marathon Oil’s Minnesota downstream assets.

Northern Tier Energy LP's shares traded at more than $17 on the New York Stock Exchange today.