TravelCenters Completes 21-Store Acquisition in Kentucky

LEXINGTON, Ky. — TravelCenters of America LLC is hot on the acquisition trail, closing another one of the six deals it had pending this summer.

TravelCenters announced Wednesday that it acquired 21 stores in Kentucky — a portion of one of its previously disclosed acquisitions — with an additional 13 stores, principally leased, expected to be acquired upon the satisfaction by the seller of certain closing conditions.

TravelCenters did not reveal the seller, but at the same time, Matrix Capital Markets Group Inc. announced the sale of the petroleum marketing and convenience store assets of Lexington-based Thoroughbred Energy LLC and its related entities. The sale included 21 convenience stores in Kentucky. An additional 13 stores, principally leased, are expected to be acquired upon the satisfaction by the seller of certain closing conditions.

Richmond, Va.-based Matrix could not be reached for confirmation that these transactions are linked.

Thoroughbred's operations are clustered around the greater Lexington area and in southern Kentucky along Interstate 75. The portfolio includes 32 company-operated and two dealer-operated convenience stores and their related fuel supply contracts, and wholesale fuel supply contracts for another 11 dealer locations.  

Seventeen of the stores are owned fee simple, and the remaining 17 are leased or ground leased. All of the stores are Shell-branded.

TravelCenters has begun to operate all of the acquired stores and substantially all of the to-be-acquired stores. TravelCenters expects that these 34 convenience stores, which average more than 3,100 square feet, will be rebranded as Minit Mart convenience stores, and the sites will undergo improvements in the coming months.

Thoroughbred is a first-generation, privately owned company founded in 1986 by Dudley Webb, a commercial real estate developer, along with Paul Koshgerian, a college roommate whose background was in motor fuels distribution. 

At the time, Lexington was a direct supply market for Shell. Jay Hall, an experienced restaurant chain operator, joined the company in 1987 and managed the operations of Thoroughbred for the past 28 years. 

In 1996, the company entered into a joint venture with Shell whereby the parties contributed their real estate holdings in the Lexington market to the joint venture and Thoroughbred became the Lexington area jobber for Shell. The company expanded rapidly over the next eight years, and in 2004, Thoroughbred bought out Shell's ownership in the joint venture.

Thoroughbred continued its expansion through site acquisitions and building new-to-industry sites.

"The decision to exit the industry was a tough one for the Thoroughbred team. The founders, our fourth partner and attorney Ronald Tritschler, and all our great employees poured their lives into this company for nearly three decades. The relationships found and fostered will remain," Hall said.

Matrix Capital Markets provided merger and acquisition advisory services to Thoroughbred, which included valuation advisory; marketing of the company through a customized, confidential, structured sale process; and negotiation of the transaction. The transaction was co-managed by Cedric Fortemps, managing director, and Vance Saunders, director. Tom Kelso, managing director and head of Matrix's Downstream Energy & Retail Group, also advised on the transaction. 

Bryce Jewett, Ryan Messier and Scott Weber of McGuireWoods LLP served as legal counsel for Thoroughbred. 

Westlake-based TravelCenters of America operates under the Minit Mart, TA and Petro Stopping Centers brands in 43 states and Canada. Its business includes 370 convenience stores, 256 of which are located at travel centers.