CORPUS CHRISTI, Texas -- Creation of a master limited partnership (MLP), Susser Petroleum Partners LP, gives Susser Holdings Corp. "the potential to realize value for our shareholders from our wholesale business that we believe is not being recognized in the market today," said Sam L. Susser, president and CEO of Susser Holdings.
As reported in a Raymond James/CSP Daily News Flash yesterday, the company announced that it would file for an initial public offering (IPO) through the formation of a master limited partnership (MLP) that will operate substantially all of Susser Holdings' legacy wholesale fuel distribution business.
"We believe this transaction will allow us to de-lever the convenience store portion of our business, reduce our cost of capital and further diversify our access to capital to fund our growth strategy," he said.
Susser Holdings would own the general partner of the new entity, Susser Petroleum Partners LP, as well as all of the MLP incentive distribution rights and a majority of its units representing limited partner interests. Concurrently with the closing of the IPO, Susser Holdings expects to receive a cash distribution from the MLP in an amount corresponding to net IPO offering proceeds (after giving effect to all discounts, fees and expenses), it said.
Susser Holdings in turn intends to use the proceeds of that distribution to construct or acquire new convenience stores and to repay, repurchase or redeem outstanding debt; however, it has not yet determined the aggregate amount to be raised in the IPO, including the amount and price of the units to be offered.
Information regarding the planned offering will be found in a registration statement that Susser Holdings expects will be filed in the coming days with the U.S. Securities & Exchange Commission (SEC).
Corpus Christi, Texas-based Susser Holdings Corp. is a third-generation, family-led business with approximately 1,100 company-operated or contracted locations. The company operates more than 540 convenience stores in Texas, New Mexico and Oklahoma under the Stripes banner. It offers restaurant service in more than 335 of its stores, primarily under the proprietary Laredo Taco Co. brand. It also supplies branded motor fuel to approximately 565 independent dealers through its wholesale fuel division.