A Roanoke-based company has been purchased for $61 million.
Lehigh Gas Partners announced Thursday that it acquired Petroleum Marketers Inc. PMI operates 85 convenience stores and nine quick-service restaurants primarily along the Interstate 81 corridor in the Roanoke region. The convenience stores are operated under the Stop in Food Stores brand.
Lehigh Gas Partners is based in Allentown, Pennsylvania.
"We are extremely excited about the acquisition of PMI," Lehigh Gas Partners chairman and CEO Joe Topper wrote in a statement. "PMI adds materially to our presence in Virginia and complements our locations in Tennessee along the I-81 corridor. We expect to be able to realize material synergies as we integrate our operations," Topper added.
Last year PMI sold 91 million gallons of gas and had $93 million in non-fuel revenue at its convenience store locations.
The petroleum side of the business distributes gasoline and other petroleum products to customers throughout Virginia, West Virginia, Tennessee, and North Carolina. Last year the company distributed 191 million gallons of petroleum products.
Here is the news release from Leigh Gas Partners:
ALLENTOWN, PA (May 1, 2014) - Lehigh Gas Partners LP (NYSE: LGP) (the "Partnership") announced today that it acquired, effective April 30, 2014, Roanoke, VA based Petroleum Marketers, Inc. ("PMI" or the "Company") for net total consideration of $61 million.
PMI operates two primary lines of business: convenience stores and petroleum products distribution. In its convenience store business, PMI operates 85 convenience stores and 9 co-located branded quick service restaurants located primarily along the Interstate 81 corridor in Virginia, with a concentration in the Roanoke, VA area. For the twelve month period ending 12/31/13, the convenience stores sold 91 million gallons of motor fuel, approximately 57 and 23 million gallons of which were Shell and Exxon branded, respectively, and had $93 million in non-fuel revenue at its convenience store locations. The convenience stores operate under the Company's own proprietary convenience store brand, Stop in Food Stores. The Partnership initially intends to operate the convenience stores within the Partnership and expects to transfer the operations of certain sites over time to third parties and to affiliate entities outside of the Partnership.
The petroleum products business distributes motor fuels and other petroleum products to customers throughout Virginia, West Virginia, Tennessee and North Carolina. For the twelve month period ending 12/31/13, the Company distributed approximately 191 million gallons of petroleum products. As part of the acquisition of PMI, LGP divested the lubricants portion of the petroleum products distribution business at closing for $14 million, which is reflected in the net total consideration for PMI of $61 million. The lubricants business was divested to an unrelated entity financed by the Chairman and CEO of LGP, Joe Topper, with the intent to sell the business to an independent third party at a later date. As part of the purchase agreement for the divestiture of the lubricants business, LGP is entitled to receive the profit, if any, from the sale of the lubricants business to an independent third party. The lubricants business divestiture transaction was reviewed and approved by the conflicts committee of the general partner of LGP.
"We are extremely excited about the acquisition of PMI," said Chairman and CEO, Joe Topper. "PMI adds materially to our presence in Virginia and complements our locations in Tennessee along the I-81 corridor. We expect to be able to realize material synergies as we integrate our operations," Topper added.
In conjunction with the acquisition of PMI and the pending acquisition of the Atlas assets, the Partnership also amended its Omnibus Agreement with its general partner and Lehigh Gas Corporation with regards to the management fee. The revised management fee consists of a base monthly fee of $670 thousand per month and a variable fee of between zero and $0.003 per gallon of wholesale fuel distributed and $0.015 per gallon of retail fuel sold. For more detail, please see the Form 8-K filed with SEC on May 1, 2014.
The transaction was funded under the Partnership's credit facility.
About Lehigh Gas Partners
Lehigh Gas Partners, headquartered in Allentown, PA, is a leading wholesale distributor of motor fuels and owner and lessee of real estate used in the retail distribution of motor fuels. Formed in 2012, Lehigh Gas Partners distributes fuel to over 1,100 locations and owns or leases more than 625 sites in fourteen states: Pennsylvania, New Jersey, Ohio, Florida, New York, Massachusetts, Kentucky, New Hampshire, Maine, Tennessee, Maryland, Delaware, West Virginia and Virginia. The company is affiliated with several major oil brands, including ExxonMobil, BP, Shell, Chevron, Sunoco, Valero, Gulf and Citgo. LGP ranks as one of ExxonMobil's largest distributors by fuel volume in the United States and in the top 10 for many additional brands. For additional information, please visitwww.lehighgaspartners.com.