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WALTHAM, Mass. -- Global Partners LP signed an agreement with Exxon Mobil Corp. to purchase 190 Mobil-branded retail gas stations and convenience stores in Massachusetts, Rhode Island and New Hampshire. The agreement also includes the right to supply Mobil-branded fuel to the stations, and to an additional 31 Mobil-branded locations owned and operated by independent dealers in those same states, Global Partners stated.
"As a leading refined products terminaling and supply company in New England, Global Partners has been a valued ExxonMobil customer for nearly 50 years," Ben Soraci, ExxonMobil's director of U.S. Retail Sales, said in a statement. "I'm pleased that Global is extending its resources, capabilities and commitment to meeting the needs of Mobil customers throughout Massachusetts, New Hampshire and Rhode Island."
Of the total 221 stations, 179 are located in Massachusetts, 22 in Rhode Island and 20 in New Hampshire. All of the stations will continue to operate under the Mobil brand as part of a long-term agreement, according to the Massachusetts-based company. The stations sold approximately 370 million gallons of gasoline and diesel fuel in 2009, Global Partners stated, noting these stations included in the deal are all ExxonMobil locations in these states.
"In recent years, Global Partners has undertaken a number of strategic acquisitions and strategic projects that have enabled us to emphasize gas and other year-round transportation fuels," Eric Slifka, Global Partnership president and CEO, said in a conference call with investors, adding the acquisition is "first and foremost a purchase that enables us to generate strong and steady volume by supplying transportation fuels to these 221 locations through our supply and terminaling system."
Regarding the retail locations, he said: "These Mobil sites are highly visible with high traffic counts, and situated on virtually non-replicable, prime locations."
Of the 190 stations being acquired by Global Partners, 42 are company operated and 148 are dealer operated. Global Partners conservatively plans to spend $6 million in maintenance and capital expenditures per year.
Global Partners also plans to negotiate a contract for the management of the company-operated sites and the dealer relationships with Alliance Energy LLC, a retail operator that is approximately 95-percent owned by members of the Slifka family.
Alliance supplies gasoline and diesel to more than 500 service stations throughout New England, New York and Pennsylvania, and operates more than 30 locations under the Fast Freddie's, Mr. Mike's and Mobil On The Run banners, according to the company's Web site.
"We look forward to working closely with the Mobil franchise dealers in providing competitively priced, safe, reliable, and quality Mobil transportation fuels throughout New England," Slifka said.
ExxonMobil employees whose positions will be impacted by the sale will receive offers of employment from Global Partners or from Alliance Energy, pending successful completion of pre-employment screening and continued satisfactory performance, according to the company. Employees of dealer-owned and/or -operated stations are employed by the dealer, and as such, are not impacted by the sale. Additionally, ExxonMobil Fleet employees are not included in the transaction, the company stated.
The purchase is estimated to total $200 million, plus environmental liabilities costs expected to total $1.5 million annually, Global Partners stated. The purchase is subject to customary regulatory approvals and other customary closing conditions, and Global Partners expects the deal to be complete by the end of 2010.
Global Partners intends to finance the purchase of the assets with borrowings under its revolving credit agreement with its bank group, as well as access to the capital markets, the company stated.
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