Transaction set to close in first quarter of 2018.
CHS has entered into an agreement to sell 33 Cenex Zip Trip retail stores located in Idaho and Washington to Par Hawaii, a subsidiary of Par Pacific Holdings Inc.
Par Pacific Holdings Inc. announced that a wholly-owned subsidiary of Par Petroleum LLC would acquired the stores from CHS Inc. for approximately $70 million plus the agreed value of inventory at closing. Par Pacific anticipates Adjusted EBITDA from the acquired stores to be approximately $7.0 to $7.5 million in the first full year of operations. The transaction is expected to close in the first quarter of 2018, subject to customary closing conditions and other approvals.
“We are pleased to begin 2018 with a strategic acquisition to complement our Wyoming refining and logistics activities. We anticipate that this acquisition will be immediately accretive to our Adjusted earnings per share and free cash flow and further diversify our earnings profile,” said William Pate, Par Pacific’s President and CEO.
As part of the transaction, the parties will enter into a multi-year branded petroleum marketing agreement for the continued supply of Cenex-branded refined products to the Cenex Zip Trip stores. In addition, the parties also will enter into a multi-year supply agreement pursuant to which an affiliate of Par Pacific will supply refined products to CHS within the Rocky Mountain and Pacific Northwest markets.
CHS told CSD that Par Hawaii is working with impacted employees on transition plans, including opportunities to retain their current positions within its company.
As the nation’s largest farmer-owned cooperative, CHS is consistently evaluating opportunities to increase value for its member owners. CHS will continue to own and operate Cenex Zip Trip locations in Montana, Minnesota, Wyoming, North Dakota and South Dakota.
“CHS is grateful to the customers and employees who have been loyal to the Cenex Zip Trip locations in Washington and Idaho,” said Angie Olsonawski, CHS vice president of refined fuel operations and supplies. “We remain dedicated to the Cenex brand and are committed to strengthening customer relationships through our remaining 35 Cenex Zip Trip locations. CHS is confident that the locations under the new ownership will continue to provide the same level of high-quality service our customers expect from Cenex Zip Trip convenience stores.”