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WESTLAKE, Ohio — TravelCenters of America LLC (TA) is taking a huge leap into the convenience channel, with six pending transactions totaling 123 convenience stores.
TA has acquired or agreed to acquire the 123 stores for approximately $230 million in six separate transactions, according to CEO Tom O'Brien. The news came during the Westlake-based company's second-quarter 2015 earnings call Thursday.
"In addition to our rebranding of these stores as Minit Marts, we expect to add prepared on-site food offerings at many of these stores and rebrand the gasoline at about half of them," he explained. "Our capital improvement plans for these are not expected to be as extensive, on average, as our efforts at the 45 stores acquired during the first half of 2015."
Assuming that all the acquisitions close, TA's convenience store portfolio will grow from 34 locations principally in one state at the beginning of this year to more than 200 locations in 11 principally Midwest states, O'Brien said.
"Our expansion into the standalone c-store space leverages our experience operating large, modern convenience stores, and I continue to believe we're investing at attractive, stabilized multiples for acquired sites," he stated. "Moreover, I believe we have also leveraged the growth in our convenience store portfolio to deepen our relationships with a number of existing and new fuel suppliers."
The company also continues to rebrand its travel center stores to the Minit Mart banner, with two stores completed so far and an additional 15 underway or in the planning stage.
As for its portfolio of travel centers, TA has acquired or agreed to acquire three sites to date this year. Its new-build travel center activities in South Carolina, Texas and Tennessee are expected to deliver in the first quarter of 2016. A new location in Illinois is expected to deliver during the first half of 2016 and one in Arizona will follow by year-end 2016, the CEO detailed.
Looking at the balance of this year, O'Brien said TA expects to close on the sale and lease with Hospitality Properties Trust (HPT) of two owned travel centers and certain assets the company owns at another for $51 million.
TA has been on an acquisition roll this year. Late in the first quarter, it acquired 26 convenience stores for $38.7 million in three separate transactions. In late April, it acquired 19 c-stores for $27.6 million.
According to O'Brien, the Westlake-based company expects the rebranding and refurbishment of these 45 acquired stores to include the addition of foodservice and TA's private-label food and beverage offers; gasoline rebranding; and the correction of deferred maintenance that existed at some of the sites upon their acquisition.
About half of this work was completed during the second quarter, he said.