Carolinas on Its Mind

Sun Capital Partners doubles retail reach with Worsley, Li'l Cricket buys

Published in CSP Daily News

By  Steve Dwyer, CSP Reporter

BOCA RATON, Fla. -- With its position in the Midwest firmly established, private investment firm Sun Capital Partners Inc. Thursday expanded its reach to the South when it acquired two convenience store chains in the Carolinas.

As reported in a CSP Daily News Flash yesterday, the firm, which holds a stake in the Boston Market restaurant chain, closed a deal—terms were undisclosed—for Wilmington, N.C.-based Worsley Operating Cos. Worsley has 124 c-stores in both North and South Carolina, operating under Scotchman, Youngs' and S-E brands, and marketing BP, Exxon, Shell, Mobil [image-nocss] and Sunoco-branded fuel. It also has proprietary Carolina Petro and Anytime Energy marks.

CSP Daily News reported in January that such a deal was brewing. Click here to read the story.

Also, David A. Blechman, principal for Boca Raton, Fla.-based Sun Capital Partners, told CSP Daily News that Sun Capital is expected to close a deal in April that will land it 88 retail locations owned and operated by Spartanburg, S.C.-based Li'l Cricket Food Stores Inc. With stores strictly in South Carolina, Li'l Cricket sells premium fuel under several major petroleum brands including Valero and Marathon.

The combined deals—involving 212 stores in North and South Carolina—essentially double the number of c-stores in Sun Capital's retail portfolio. In the Midwest, the investment firm's holdings consist of Village Pantries Holding Corp., with 190 c-stores throughout Indiana, Michigan and Ohio.

Blechman said the desire to expand geographically to the Southeast was meaningful to Sun Capital, and that the firm recognized the two acquiring chains as having ideal economies of scale that the investment firm seeks as it evaluates retail properties.
From a scale perspective, Blechman said Sun Capital's sweet spot are c-store chains in the range of 50 to more than 100 stores; however, in an established region, such as the Midwest, the investment firm would consider smaller retailers in the range of 8 to 10 stores. "These [212 Carolina] stores have a good presence in their market and good locations and can benefit from additional capital," Blechman said. He said Sun Capital does not have a definitive expansion plan in place encompassing either of its two affiliated regions—Midwest and South.Blechman said Sun Capital likes the fact that the companies acquired possess solid retail facilities with the potential to be upgraded within profit centers as foodservice and coffee.
He said there would be a seamless transition with both Li'l Cricket and Worsley deals, but he was unable to disclose capital terms of either deal.One part of the Worsley deal was that Jeffrey W. Turpin was named president and CFO, effective immediately. Turpin had served as COO and CFO of Worsley, and has been with the company for 13 years. Turpin was not available for comment.

Terry Lehman, senior vice president and COO of Li'l Cricket, told CSP Daily News that the deal with Sun Capital had been in discussion for several months. A family-owned business that began with one store in 1982, L'il Cricket sells approximately 65 million gallons per year in motor fuel, with mainly traditional c-stores with little or no foodservice assets or car washes, said Lehman.

The deal, said Lehman, was precipitated by the expected retirement of president and CEO Gordon Zuber, who is 76. Lehman said he does not anticipate management upheaval to occur when the deal wraps up—and neither does Blechman. "We are looking forward to the new relationship with Sun Capital and anticipate that there will be investments in our stores and an accelerated plan to add more locations."

Morgan Keegan & Co. Inc. served as financial advisor to both Worsley and Li 'l Cricket. Sun Capital Partners manages more than 185 companies worldwide with combined sales in excess of $35 billion since its inception in 1995.