Purchase of 22 stores in San Antonio and Austin is third acquisition in less than three months by CST and CrossAmerica.
CST Brands Inc. and CrossAmerica Partners LP have agreed to jointly purchase 22 convenience stores in San Antonio and Austin, Texas from Landmark Industries, the third combined acquisition in less than three months.
The companies also announced the first dropdown transaction of $50.4 million between CST Brands and CrossAmerica, which will close effective Jan. 1, 2015. In addition, the companies have reached final agreement on allocation of the final purchase price paid in connection with the previously announced acquisition of New York-based Nice N Easy Grocery Shoppes, which closed on Nov. 1, 2014.
“With the Landmark acquisition, we are gaining strong operating sites within our existing footprint, which will allow us to leverage our regional distribution and back office efficiencies very quickly,” said Kim Lubel, chairman and CEO of CST Brands. “Moreover, this announcement is the third acquisition made by CST and CrossAmerica in less than three months since we closed on our purchase of the general partner of CrossAmerica, and reflects our combined vision of growth for both companies.”
Acquisition of Landmark Industries
CST Brands and CrossAmerica have agreed to jointly purchase 22 convenience stores from Landmark Industries. The stores operate under the Timewise brand name and provide Shell branded fuel. Of the 22 owned fee simple locations, 20 are located in the San Antonio area and two are located in the greater Austin area.
CrossAmerica will be purchasing all of the 22 fee sites as well as certain wholesale fuel distribution assets for $43.5 million. CST Brands will be purchasing the personal property, working capital and the convenience store operations for $20.2 million. The allocation of the purchase price between CrossAmerica and CST Brands is subject to adjustment following completion of real property appraisals prior to the end of January 2015. Both parties expect the transaction to be accretive.
CrossAmerica will lease the acquired real estate to CST Brands at a “triple net” lease rate of 7.5% and will provide wholesale fuel supply to the 22 sites under long term agreements with a fuel gross profit margin of approximately five cents per gallon. These 22 sites distributed approximately 41.3 million gallons for the 12-month period ending Dec. 31, 2013.