Sunoco Announces Acquisitions and Divestiture

Sunoco acquires wholesale fuel distribution business and c-store assets while divesting an ethanol plant.

Sunoco LP has acquired Schmitt Sales Inc.’s wholesale fuel distribution business and is set to acquire certain convenience store locations from Speedway LLC. Sunoco will convert the acquired convenience store locations to wholesale distribution sites.

Combined, these wholesale fuels businesses distribute approximately 180 million gallons of fuel annually across a network of dealer and commission agent-operated locations in the Upstate New York, Ohio, Pennsylvania and West Virginia markets.

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Total consideration for both acquisitions is approximately $50 million plus working capital adjustments.

These acquisitions are consistent with Sunoco’s strategy of utilizing its scale to grow the core fuel distribution business. Sunoco will fund the transactions with cash on hand and amounts available under its revolving credit facility, while continuing to maintain its targeted leverage ratio. These transactions are expected to be accretive to Sunoco with respect to distributable cash flow in the first year.

Additionally, Sunoco is also divesting its ethanol plant, including the grain malting operation, in Fulton, N.Y. to Attis Industries Inc. As part of the transaction, Sunoco will enter into a 10-year ethanol offtake agreement with Attis.

Total consideration for the divestiture is $20 million in cash. Sunoco expects to use the proceeds to repay indebtedness as it continues to maintain its targeted leverage ratio. The transaction is subject to regulatory clearances and customary closing conditions and is expected to close in the first quarter of 2019.

Sunoco LP is a master limited partnership that distributes motor fuel to approximately 10,000 convenience stores, independent dealers, commercial customers and distributors located in more than 30 states.