Susser Wholesale Division Spinoff Raises $195M

HOUSTON -- Susser Holdings Corp. officially spun off its wholesale fuels distribution business this morning, and thus far investors have liked what they have seen.

Last night, Susser Petroleum Partners LP priced its initial public offering (IPO) of 9.5 million shares at $20.50 per share. That means that the company raised a total of $195 million. Once the new company -- which will distribute fuels to Susser Holdings' Stripes convenience store division and other third parties -- began trading under the symbol SUSP on the New York Stock Exchange this morning, shares of the company jumped to more than $23. The shares subsequently stabilized in the $22 to $23 range throughout the morning.

Susser Petroleum Partners plans to use the $195 million raised in the IPO to repay its parent company for capital expenditures and to buy about $147 million of securities expected to be used as collateral to secure a long-term loan.

Upon conclusion of the IPO, the public will own a 43.4 percent interest in Susser Petroleum Partners. The underwriters for the IPO, BofA Merrill Lynch, Barclays Capital, Wells Fargo Securities and UBS Securities have an option to purchase an additional 6.5 percent of the newly formed company.

During an earnings conference call last month, Susser Holdings Corp. CEO Sam L. Susser noted that the spinoff of Susser Petroleum Partners was a good idea because, "We believe the full value of the wholesale division has not been fully recognized."