Deal Expands Global’s Convenience Store Footprint and Retail Gasoline
Assets in the Northeast and Mid-Atlantic; Partnership to Discuss
Transaction in Conference Call at 10 a.m. ET Today
WALTHAM, Mass.--(BUSINESS WIRE)--Oct. 9, 2014--
Global
Partners LP (NYSE: GLP) (“Global” or “the Partnership”) announced
today that its Global Montello Group Corp. subsidiary has entered into a
definitive agreement to acquire 100% of the equity interest in Warren
Equities, Inc. (“Warren” or “the company”), one of the largest
independent marketers of petroleum products in the Northeast, from the
Warren Alpert Foundation. The total consideration is approximately $383
million, subject to closing adjustments. The acquisition is expected to
be accretive in the first full year of operations. Closing is expected
in the first quarter of 2015, subject to customary closing conditions
and regulatory approvals. Global, which has availability under its
revolving credit facility to consummate the transaction, expects to
finance the transaction longer term with approximately a 60/40 blend of
debt and equity.
Warren sells approximately 500 million gallons of fuel annually through
approximately 520 retail locations. Based in Providence, R.I., the
company operates 147 Xtra Mart convenience stores, markets fuel through
53 commissioned agent locations and supplies fuel to approximately 320
dealers. The company operates in 10 states: Massachusetts, Connecticut,
Maine, New Hampshire, New York, Rhode Island, New Jersey, Pennsylvania,
Maryland and Virginia. In addition to its proprietary Xtra Fuels brand,
the company markets fuel through several major brands, including Exxon,
Mobil, Shell, BP, Sunoco, CITGO, Gulf and Valero.
“Warren’s portfolio of Northeast retail sites is an excellent strategic
fit that complements our existing footprint in the region,” said Eric
Slifka, the Partnership’s President and Chief Executive Officer. “This
transaction provides a platform for Global to expand into the
mid-Atlantic region, and leverage our expertise to drive customer
traffic and store profitability throughout the network.”
“By leveraging our infrastructure as well as our expertise in fuel
sourcing, merchandising and other areas, we believe we can optimize
value throughout the C-store, retail/wholesale gasoline and operating
functions,” Slifka said. “Based on our analysis of these sites and the
significant synergies we anticipate as a result of this transaction, we
believe we will substantially improve the performance relative to
Warren’s historical results. We expect to generate EBITDA of between $50
million and $60 million in the second full year of operations.”
“This acquisition is designed to further enhance the earnings growth and
cash generation of our business through the addition of strategic,
complementary assets that drive higher volumes through our network,”
Slifka said. “We are excited about the addition of the Warren portfolio
to our asset base.”
“This transaction is the right strategic step for our company,” said
Warren Chairman Herb Kaplan. “Global’s acquisition will enable Warren to
become part of an established, growing and financially strong master
limited partnership that is recognized as a leader in fuel distribution
and retail asset development.”
Conference Call Information
Management will discuss this announcement in a teleconference call for
analysts and investors today.
Time: 10:00 a.m. ET
Dial-in numbers:
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877-709-8155 (U.S. and Canada)
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201-689-8881 (International)
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The call also will be webcast live and archived on the Global Partners'
website, www.globalp.com.
About Global Partners LP
A publicly traded master limited partnership, Global Partners LP is a
midstream logistics and marketing company. Global owns, controls or has
access to one of the largest terminal networks of refined petroleum
products and renewable fuels in the Northeast, and is one of the largest
distributors of gasoline, distillates, residual oil and renewable fuels
to wholesalers, retailers and commercial customers in New
England and New York. Global is a leader in the purchasing, selling and
logistics of transporting domestic and Canadian crude oil and other
products by rail across its “virtual pipeline” from the mid-continent
region of the U.S. and Canada to the East and West Coasts for
distribution to refiners and other customers. With a portfolio of
approximately 900 locations primarily in the Northeast, Global also is
one of the largest independent owners, suppliers and operators of
gasoline stations and convenience stores. In addition, Global is a
distributor of natural gas and propane. Global is No. 146 in the Fortune
500 list of America’s largest corporations. For additional information,
visit www.globalp.com.
Forward-looking Statements
This news release may contain
forward-looking statements. Forward-looking statements include, without
limitation, any statement that may project, indicate or imply future
results, events, performance or achievements, and may contain the words
“may,” “believe,” “should,” “could,” “expect,” “anticipate,” “plan,”
“intend,” “estimate,” “will likely result,” or other similar
expressions. In addition, any statement made by Global Partners LP’s
management concerning future financial performance (including future
revenues, earnings or growth rates), ongoing business strategies or
prospects and possible actions by Global Partners LP or its subsidiaries
are also forward-looking statements.
Although Global Partners LP believes these forward-looking statements
are reasonable as and when made, there may be events in the future that
Global Partners LP is not able to predict accurately or control, and
there can be no assurance that future developments affecting Global
Partners LP’s business will be those that it anticipates.
For additional information about risks and uncertainties that could
cause actual results to differ materially from the expectations Global
Partners LP describes in its forward-looking statements, please refer to
Global Partners LP’s Annual Report on Form 10-K and subsequent filings
the Partnership makes with the Securities and Exchange Commission.
Readers are cautioned not to place undue reliance on the forward-looking
statements, which speak only as of the date on which they are made.
Global Partners LP expressly disclaims any obligation or undertaking to
update forward-looking statements to reflect any change in its
expectations or beliefs or any change in events, conditions or
circumstances on which any forward-looking statement is based.
Source: Global Partners LP
Global Partners LP
Daphne H. Foster, 781-894-8800
Chief
Financial Officer
or
Edward J. Faneuil, 781-894-8800
Executive
Vice President,
General Counsel and Secretary