DALLAS and HOUSTON — Energy Transfer Partners LP (ETP) will dropdown 100 percent of Susser Holdings Corp. to Sunoco LP for approximately $1.94 billion in cash and stock.
The transaction will consist of Houston-based Sunoco LP paying ETP $970 million in cash, as well as issuing 22 million units of its stock, valued at an additional $970 million based upon the five-day volume-weighted average price of Sunoco LP’s common units as of July 14.
The transaction is expected to close Aug. 1 and is subject to customary closing conditions.
Included in the Susser Holdings dropdown is more than 600 convenience stores operating under the Stripes and Sac-N-Pac brand names, primarily operating in Texas, New Mexico and Oklahoma.
According to ETP, the timing of this transaction is “driven by the desire to accelerate [Sunoco LP’s] exposure to the fastest-growing retail business with its exciting backlog of organic growth opportunities and strong EBITDA performance.”
In addition, Sunoco LP’s focus on a broad range of third-party acquisition opportunities will be enhanced upon the completion of this transaction, reported Dallas-based ETP.
ETP added that this dropdown will be immediately accretive to its distributable cash flow for 2015 and beyond. For Sunoco LP, the transaction is expected to break even with respect to distributable cash flow in 2015 and be “significantly accretive thereafter.”
Once this dropdown is completed, Sunoco LP’s retail operations will consist of Susser Holdings, Aloha Petroleum, Mid-Atlantic Convenience Stores and Tigermart locations.
ETP will still own all Sunoco Inc. retail assets. However, as CSNews Online previously reported, ETP plans to dropdown all Sunoco Inc. retail assets to Sunoco LP no later than mid-2017.
Energy Transfer Partners is a master limited partnership (MLP) that owns a diverse portfolio of U.S. energy assets.
Also a MLP, Sunoco LP operates more than 150 convenience stores and gas stations, as well as distributes motor fuel to convenience stores, independent dealers, commercial customers and distributors.