Marathon Sells Minnesota Stores, Other Downstream Assets

FORT WORTH, Texas -- ACON Investments and TPG Capital have signed definitive agreements with Marathon Oil Corp.s wholly owned subsidiary Marathon Petroleum Company LP (MPC) to acquire the majority of the oil compan's Minnesota downstream assets, including convenience stores, a refinery, terminals, SuperMoms bakery and more.

TPG Capital and ACON Investments will form a new company, Northern Tier Energy LLC, to operate the assets. They will be equal partners in the investment.

ACON Investments and TPG Capital will be acquiring a portfolio of c-stores, including 166 owned and leased SuperAmerica stores (159 in Minnesota, six in Wisconsin and one in South Dakota) and 67 franchised SuperAmerica stores. It will also acquire contracts to supply refined products to an additional 90 stores, as well as ownership of the SuperMom's bakery and commissary. The partners will also purchase the company's the 74,000-barrel-per-day St. Paul Park refinery and an equity interest in the Minnesota Pipe Line, the pipeline which supplies the majority of the refinery's crude oil.

The total sale value of the operating assets and associated inventories is approximately $900 million; the agreements also contain earnout and margin support components subject to certain conditions. Marathon and the investor group first announced that a letter of intent had been signed on May 19, 2010. The transaction is expected to close before year-end, subject to customary closing conditions. Marathon will provide transition services after closing to support the creation of the new enterprise, the companies said in a statement.

Northern Tier Energy will operate the Minnesota assets as a stand-alone company. The senior Northern Tier management team has extensive refining industry experience, with Mario E. Rodriguez serving as Northern Tier Energy's chief executive officer and Hank Kuchta serving as its chief operating officer.

Following the close of the transaction, Northern Tier Energy will seek to grow through continued investments in the Minnesota assets. In addition, Northern Tier Energy will look to acquire additional refining and marketing assets with similarly attractive characteristics.

"The assets we are acquiring are strategically well positioned to withstand the challenges of the global market and have been well maintained and invested in by Marathon," said Jonathan Ginns, founder and managing partner, ACON Investments. "They have an excellent safety and environmental compliance record and have been consistently profitable, even through the recent recession. We believe that under Mario and Hank's experienced leadership Northern Tier Energy will transition smoothly to operating as a fully independent company."

Rodriguez said the new team is excited to launch Northern Tier Energy with this investment and "looking forward to working with the talented employees across the refinery, terminal, retail and SuperMom's businesses and to operate with the highest commitment to safety, reliability and the environment. Our goal is to grow Northern Tier Energy profitably and to be a responsible corporate citizen in the communities in which we operate."

ACON and TPG's financial advisors were Goldman Sachs, J.P. Morgan and Bank of America Merrill Lynch. ACON Investments is a Washington, D.C.-based private equity firm with offices in Los Angeles, Houston, Madrid, Sao Paulo, and Mexico City. Founded in 1996, ACON manages private equity funds and special purpose investment partnerships with investments in the United States, Europe and Latin America. ACON has been a longtime energy investor, executing investments in upstream and midstream oil and gas as well as in energy infrastructure and energy services, including Mariner Energy, Chroma Oil and Gas, Milagro Oil and Gas, Signal International, Tropigas LLC, and SAE Towers.

TPG Capital is the global buyout group of TPG, a private investment firm founded in 1992, with more than $47 billion of assets under management and offices in San Francisco, Beijing, Fort Worth, Hong Kong, London, Luxembourg, Melbourne, Moscow, Mumbai, New York, Paris, Shanghai, Singapore and Tokyo. TPG Capital has extensive experience with global public and private investments executed through leveraged buyouts, recapitalizations, spinouts, growth investments, joint ventures and restructurings. It has investments in Alinta Energy, Belden & Blake, Copano Energy, Denbury Resources, Energy Future Holdings (formerly TXU), Texas Genco and Valerus Compression Services. TPG also has been an active investor in the retail sector with investments including American Tire Distributors, Burger King, Debenhams, J.Crew, Myer, Neiman Marcus and PETCO.

In other Speedway SuperAmerica news, the chain will offer PNC-branded ATMs in Michigan. Through an agreement with PNC Bank, SSA and self-service provider, EDC, is putting the ATMS in nearly 300 locations across the state.

"We are dedicated to providing our customers with great service," Grant Heminger, SSA's vice president of marketing, said in a statement. "PNC and EDC share that commitment, which is why this relationship provides greater value and convenience to our customers."

The PNC-branded ATMs, which are owned and operated by EDC, are accessible to all Speedway SuperAmerica customers. PNC Bank customers will enjoy surcharge-free withdrawals and the ability to check their balances at the 294 store-based ATMs, according to the companies.

EDC will maintain the ATMs at the Speedway locations.