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    Global Partners Sees Significant Interest in East Coast Retail Assets

    MLP wants to shed 125 non-strategic stores.

    By Brian Berk, Convenience Store News

    WALTHAM, Mass. — Global Partners LP has received “significant interest from prospective buyers” for the 86 East Coast convenience stores it put on the sales block last month, President and CEO Eric Slifka stated Monday during the master limited partnership’s (MLP) 2016 fiscal first-quarter earnings call.

    Final bids on the stores — located in Connecticut, Maine, Maryland, New Hampshire, New York and Rhode Island  — are due by the end of June. Global Partners retained NRC Realty & Capital Advisors LLC to conduct the sale, with the retailer hoping to receive a purchase price of approximately $100 million for the 86 sites.

    Slifka noted that he's seen c-stores recently sell in EBITDA multiples of six times to as many as double-digit times, based upon if a buyer is only purchasing the real estate or if the real estate is being sold along with an established store location.

    The 86 East Coast stores are part of a larger plan for Global Partners to sell a total of 125 convenience stores by the end of this year. Slifka did not state why Global Partners wants to specifically sell the East Coast stores, but did say that, in general, when it decides to sell off retail locations, it is because they are considered non-strategic assets.

    Despite the sale of these select assets, Slifka affirmed during Monday's earnings call that the MLP remains committed to its Gasoline Distribution Station Operation (GDSO) division, under which its retail assets are housed. In fact, Global Partners purchased 22 Convenience Plus locations in western Massachusetts from O’Connell Oil Associates Inc. last month. 


    For its fiscal first quarter ended March 31, product margins in Global Partners’ GDSO segment came in at $108.3 million, compared to $98.4 million in its 2015 first quarter. The partnership cited its 2015 acquisition of 97 retail gas stations and seven dealer supply contracts from Capitol Petroleum Group for this margin increase. 

    Sales in the GDSO segment, meanwhile, dropped by $79 million year over year to $701.3 million.

    Looking ahead, Slifka reported several raze-and-rebuilds and new-to-industry retail sites are slated to be completed this year.

    Companywide, Waltham-based Global Partners reported a 2016 Q1 net loss of $7 million, vs. a profit of $30.4 million in the year-ago period. EBITDA came in $42.6 million, vs. $71.8 million in the same period a year ago.

    “Continued tight crude differentials, significantly warmer temperatures and rising wholesale gasoline prices negatively affected first-quarter results,” concluded Slifka. “While weather and changing commodity prices are everyday factors, tight crude differentials and fixed costs supporting our crude-by-rail operations remain key challenges to our business.”

    By Brian Berk, Convenience Store News
    • About Brian Berk Brian Berk is managing editor of Stagnito Business Information's Convenience Store News and Convenience Store News for the Single Store Owner, where he specializes in covering motor fuels, technology and financial news. He has served the magazine industry for 14 years and has also worked in the radio and newspaper fields. Berk holds a bachelor's degree in communications from the State University of New York at Cortland and a master's degree in journalism from Quinnipiac University in Hamden, Conn.

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