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SAN ANTONIO — CST Brands Inc. closed its previously announced sale of 79 convenience stores in the California and Wyoming markets to 7-Eleven Inc. and its wholly owned subsidiary, SEI Fuel Services Inc., for $408 million. This marks CST’s exit from these two states.
Seventy-six of the c-stores are located in California with the remaining three in Wyoming.
"These have been great-performing stores, which is a tribute to our hardworking, dedicated employees," Kim Lubel, chairman, president and CEO of CST, said at the time the transaction was first announced in May. "This is a tremendous opportunity for the right buyer and we look forward to working with 7-Eleven to close this transaction."
With the closing of this transaction, CST expects to realize a tax benefit from the completion of a like kind exchange strategy with its acquisition of the Flash Foods Inc. properties in Georgia and Florida that closed earlier this year. It anticipates using the majority of the cash proceeds from the sale to pay down borrowings under CST’s revolving credit facility.
This agreement with 7-Eleven comes after CST Brands announced it was beginning the process of conducting a full exploration of strategic alternatives to further enhance stockholder value.
The San Antonio-based c-store operator has also been rumored as takeover target, with 7-Eleven parent 7 & i Holdings reportedly interested in purchasing the entire company. The Japanese company has since refuted these reports however.
Alimentation Couche-Tard Inc., Sunoco LP and Speedway LLC are among others reportedly interested in buying CST outright.
In correlation to the closing of the 79-store transaction, CST also announced it agreed to compensate CrossAmerica Partners LP for the decrease in revenues related to its 17.5-percent interest in CST’s wholesale fuel business, CST Fuel Supply LP. CST and the CrossAmerica have agreed to a refund of a portion of the 2015 purchase price paid by the master limited partnership for its ownership interest in CST Fuel Supply, as it relates to the approximately 191 million gallons sold annually to the 79 California and Wyoming sites that were sold to 7-Eleven.
The total refunded consideration is approximately $18.2 million.
CST Brands Inc. operates approximately 2,000 locations throughout the southwestern United States, Georgia, Florida, New York and eastern Canada.
Allentown, Pa.-based CrossAmerica LP’s general partner, CrossAmerica GP LLC, is a wholly owned subsidiary of CST Brands. In addition, the master limited partnership distributes fuel to more than 1,250 locations and owns or leases more than 800 convenience and fuel sites.