Susser Petroleum Partners Launches IPO

Published in CSP Daily News

Common units being offered to public represent 43.4% limited partner interest

CORPUS CHRISTI, Texas -- Susser Petroleum Partners LP, a Delaware limited partnership, has announced that it has commenced an initial public offering (IPO) of 9.5 million common units representing limited partner interests in Susser Petroleum Partners.

Susser Holdings Corp. formed Susser Petroleum Partners to engage in the primarily fee-based wholesale distribution of motor fuels to Susser Holdings and third parties.

Susser Petroleum Partners purchases motor fuel primarily from independent refiners and major oil companies and distribute it throughout Texas and in Louisiana, New Mexico and Oklahoma to approximately 550 of Susser Holdings' Stripes convenience stores, pursuant to a 10-year motor fuel distribution contract; more than 80 other independently operated consignment locations where Susser Holdings sells motor fuel to retail customers; more than 480 convenience stores and retail fuel outlets operated by independent operators, which it refer to as "dealers"; and more than 1,300 other commercial customers, including unbranded c-stores, other fuel distributors, school districts and municipalities and other industrial customers.

In addition to revenues earned in its wholesale motor fuel distribution business, Susser Petroleum Partners will also receive rental income from c-store properties that it lease or subleases to Susser Holdings and third parties. It currently receives rental income from 53 properties, most of which are in Texas.

Pursuant to the omnibus agreement that it will enter into with Susser Holdings at the closing of this offering, Susser Petroleum Partners will have a three-year option to purchase up to 75 new or recently constructed Stripes convenience stores from Susser Petroleum Partners and lease them back to SHC. Any stores that Susser Petroleum Partners purchases and leases back to Susser Holdings pursuant to the 75-store option will be added to the Susser Holdings distribution contract, pursuant to which Susser Petroleum Partners will be the exclusive distributor of motor fuel to the applicable stores for 10 years from the time of purchase at cost plus a fixed profit margin of three cents per gallon.

The common units being offered to the public represent a 43.4% limited partner interest in Susser Petroleum Partners, or a 49.9% limited partner interest if the underwriters exercise their option to purchase additional common units in full.

The filing is pursuant to a registration statement on Form S-1 previously filed with the U.S. Securities & Exchange Commission (SEC). The underwriters will be granted a 30-day option to purchase up to an additional 1.425 million common units. The common units will be listed on the New York Stock Exchange (NYSE) and traded under the symbol SUSP.

BofA Merrill Lynch, Barclays, Wells Fargo Securities and UBS Investment Bank are acting as joint book-running managers for the offering.

RBC Capital Markets, Raymond James, BMO Capital Markets, Baird and Janney Montgomery Scott are acting as co-managers for the offering.

Click here to view the SEC filing and prospectus.

Corpus Christi, Texas-based Susser Holdings is a third-generation, family-led business with approximately 1,100 company-operated or contracted locations. It operates approximately 550 convenience stores in Texas, New Mexico and Oklahoma under the Stripes banner. Restaurant service is available in more than 335 of its stores, primarily under the proprietary Laredo Taco Co. brand. The company also supplies branded motor fuel to approximately 565 independent dealers through Susser Petroleum Co., its wholesale fuel division.