Atlas Oil Sells BP Assets in Chicago, Northwest Indiana

Lehigh Gas Partners acquiring contracts, stations

Published in CSP Daily News

Atlas Oil Lehigh Gas Partners (CSP Daily News / Convenience Store Petroleum)

TAYLOR, Mich. -- Atlas Oil Co. announced its planned sale of its BP-branded assets in Chicago and northwestern Indiana to Lehigh Gas Partners LP, Allentown, Pa, and Parent Petroleum Inc., St. Charles, Ill. Atlas Oil supplies BP gas stations in that region with BP-branded gasoline and other fuel products.

As reported in a 21st Century Smoke/CSP Daily News Flash, Lehigh Gas Partners entered into an asset purchase agreement with affiliates of Atlas Oil to purchase 55 wholesale supply contracts, 11 fee or leasehold sites, two commission marketing contracts and certain other assets for total consideration of $38.5 million.

In addition, Lehigh Gas Partners is acquiring certain other short-term financing assets associated with the acquired wholesale supply and commission marketing contracts for $11.9 million, bringing the total consideration for the transaction to $50.4 million, subject to certain closing adjustments.

The 55 wholesale supply contracts have a weighted average term remaining of approximately 15 years. The 11 fee or leasehold sites are all currently leased to third party commission agents.

The short-term financing assets relate to previously negotiated purchase agreements of certain sites by the dealers occupying the locations. All of the financing assets relate to sites that are supplied under contracts acquired in the transaction. The financing assets have a weighted average maturity of approximately June 2015.

The transaction is expected to close during the second quarter 2014.

"We are pleased to enter the Chicago market and to expand our relationship with BP," said Lehigh Gas Partners chairman and CEO Joe Topper. "The transaction enables us to acquire quality assets and provides us immediate scale in the region and a base for us to support future growth."

Michael Evans, president and COO of Atlas Oil, said, "Atlas and BP have had a strong relationship and have been brand partners for a number of years. After careful analysis, we determined this to be the right decision. Atlas Oil remains committed to the growth of its fuel distribution and supply management businesses."

Lehigh Gas Partners is a leading wholesale distributor of motor fuels and owner and lessee of real estate used in the retail distribution of motor fuels. Formed in 2012, Lehigh Gas Partners distributes fuel to more than 800 gas station and convenience store locations and owns or leases more than 550 sites in 13 states: Pennsylvania, New Jersey, Ohio, Florida, New York, Massachusetts, Kentucky, New Hampshire, Maine, Tennessee, Maryland, Delaware and Virginia. The company is affiliated with several major oil brands, including ExxonMobil, BP, Shell, Chevron, Sunoco, Valero, Gulf and Citgo. LGP ranks as one of ExxonMobil's largest distributors by fuel volume in the United States and in the top 10 for many additional brands.

Taylor, Mich.-based Atlas Oil is a national fuel supply, logistics and services company delivering comprehensive solutions to customers throughout the distribution lifecycle, from crude oil companies to refineries to retail gas stations and commercial end users nationwide.

Part of CSP's 2014 Convenience Top 101 retailers
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M&A