You are here
By Linda Lisanti
FRANKLIN, Tenn. -- Delek US Holdings Inc. announced Thursday that MAPCO Express Inc., a wholly-owned subsidiary, has signed an agreement with Dalton, Ga.-based Fast Petroleum Inc. to purchase of all of its 43 retail fuel and convenience stores.
Fast Petroleum -- a multi-branded jobber supplying dealers with BP/Amoco, Citgo, Shell, Conoco, Phillips and unbranded products -- has been in the oil business since 1967. The company also operates two transport companies and pulls petroleum products from every major terminal in Tennessee, according to its Web site. A call for comment by CSNews Online to Fast Petroleum was not returned Thursday.
The 43 stores are in northwest Georgia and southeast Tennessee, markets in which MAPCO currently operates only one store. MAPCO will own 30 of the properties and assume leases for the remaining 13. The transaction is expected to be completed within 30 days.
"We are pleased to announce this definitive agreement, which is consistent with the strategy we stated during our recent initial public offering to continue to expand our concept of the 'neighborhood' convenience store within the Southeast. This transaction is representative of the opportunities we believe exist to implement our strategy to grow in our existing and contiguous markets," remarked Uzi Yemin, president and chief executive officer of Delek.
"Through this transaction, we will substantially expand our market presence in northern Georgia and establish our initial presence in Chattanooga and southeast Tennessee, complementing our leading market positions in Nashville and northern Alabama," he continued.
MAPCO currently operates 349 stores; 140 of them are in the Nashville market.
The sale will cost Delek approximately $46 million plus the value of inventory, which will be determined at the transaction's end. The company will fund the cash purchase price from its cash and cash equivalents, including the net proceeds of its recent initial public offering.
Delek raised net proceeds of about $172 million through its initial public offering of 11.5 million shares of stock, priced at $16 per share. The company said proceeds from the offering would be used to repay debt, acquisitions and capital improvements.
Yemin said they expect the Fast Petroleum transaction to be immediately accretive to their financial results. "As we have previously demonstrated through the successful integration of four large retail acquisitions and several smaller ones, we intend to assimilate these stores quickly through our initiatives to deliver our culture and programs," he said.
"In operating these stores under our 'neighborhood' store concept, we will price and stock each store individually to meet the customs and tastes of each community, while taking advantage of our purchasing economies of scale and the marketing, operating and financial resources we enjoy as a large convenience store operator. We also intend to continue evaluating additional opportunities for retail fuel and convenience store acquisitions."
Aside from Georgia and Tennessee, other areas of the country that MAPCO is eying up for expansion opportunities are: Kentucky, Alabama, Florida, Arkansas and Louisiana, Dana Young, vice president of real estate, told CSNews Online .
In addition to acquisitions, the company's expansion plans call for 10 new MAPCO Mart stores to be built by the end of this year and nine to be constructed next year, Young said. MAPCO Marts are MAPCO's new line of c-stores that emphasize an expanded menu of food items. Additionally, ten existing MAPCO Express stores will be retrofitted to the new MAPCO Mart concept each year, he said.
It is unclear as of now whether any of the Fast Petroleum locations will also be retrofitted into MAPCO Marts. Paul Pierce, the company's vice president of marketing, told CSNews Online Thursday that he could not provide any further details about the deal because of the current confidentiality agreement.