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ENON, Ohio — September ended on a good note for Speedway LLC as it closed on its acquisition of Hess Corp.'s retail operations and related assets.
Speedway, a subsidiary of Findlay, Ohio-based Marathon Petroleum Corp. (MPC), closed on the purchase of Hess' retail operations, transport operations and shipper history on various pipelines on Tuesday, Sept. 30. The $2.82-billion transaction includes a $2.37-billion base purchase price, capital leases that were cash settled at closing for $263 million, and $194 million of estimated working capital, subject to post-closing adjustments.
The acquisition was first revealed May 22. Under the terms of the agreement, many of the 1,200-plus Hess locations will continue to carry the company's well-known kelly green logo for the short term. However, Speedway must rebrand all 1,256 retail sites to its own brand within three years of the transaction closing. As a result, all Hess stations will carry the Speedway brand name by the end of 2017, as CSNews Online previously reported.
New York-based Hess announced in early 2013 that it planned to spin off or sell its retail division and focus on becoming a pure-play exploration and production company.
"This transformative acquisition provides Speedway a significant growth platform by expanding our retail presence to 23 states throughout the East Coast and Southeast," said MPC President and CEO Gary R. Heminger. "Growing Speedway's footprint as a premier convenience store operator into the eastern U.S. supports our strategic focus of increased investment in our stable cash-flow businesses. We believe targeting the significant synergy potential in this business, including best practices and economies of scale, should drive continued earnings growth into the future and enhance the value proposition to MPC investors."
MPC is the nation's fourth-largest refiner. Marathon-branded gasoline is sold at approximately 5,300 independently owned retail outlets across 19 states. Enon-based Speedway is now the nation's second-largest company-owned and -operated convenience store chain with approximately 2,740 stores in 23 states.