Global Partners To Buy Warren Equities For $383 Mln

(RTTNews) - Midstream logistics and marketing company Global Partners LP (GLP) said Thursday that its subsidiary Global Montello Group Corp. has agreed to acquire Warren Equities Inc., an independent marketer of petroleum products in the Northeast, for about $383 million.

The company noted that the deal will enable it to expand its convenience store footprint and retail gasoline assets in the Northeast and Mid-Atlantic.

Global Montello will acquire 100 percent of the equity interest in Warren Equities from the Warren Alpert Foundation. The total consideration of $383 million is subject to closing adjustments.

A publicly traded master limited partnership, Global Partners has a portfolio of about 900 locations primarily in the Northeast. The company is one of the largest independent owners, suppliers and operators of gasoline stations and convenience stores. In addition, Global Partners is a distributor of natural gas and propane.

Global Partners expects closing of the deal to occur in the first quarter of 2015 and be accretive in the first full year of operations.

The company, which has availability under its revolving credit facility to consummate the transaction, expects to finance the transaction longer term with approximately a 60/40 blend of debt and equity.

Providence, Rhode Island-based Warren Equities sells about 500 million gallons of fuel annually through about 520 retail locations. The company operates 147 Xtra Mart convenience stores, markets fuel through 53 commissioned agent locations, and supplies fuel to approximately 320 dealers.

Warren Equities operates in 10 states - Massachusetts, Connecticut, Maine, New Hampshire, New York, Rhode Island, New Jersey, Pennsylvania, Maryland and Virginia. In addition to its proprietary Xtra Fuels brand, the company markets fuel through several major brands, including Exxon, Mobil, Shell, BP, Sunoco, CITGO, Gulf and Valero.

Eric Slifka, President and Chief Executive Officer of Global Partners said, "Warren's portfolio of Northeast retail sites is an excellent strategic fit that complements our existing footprint in the region. This transaction provides a platform for Global to expand into the mid-Atlantic region, and leverage our expertise to drive customer traffic and store profitability throughout the network."

Slifka said that Global Partners expects significant synergies from the transaction and expects to generate earnings before interest, taxes, depreciation and amortization or EBITDA of between $50 million and $60 million in the second full year of operations.

GLP is trading at $40.76, up $0.73 or 1.83 percent on a volume of 7,784 shares.