“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,” says Susser CEO.
Susser Holdings Corp.’s Board of Directors has approved the filing of a registration statement to effect an initial public offering (IPO) through the formation of a master limited partnership (MLP) that will operate substantially all of Susser Holding’s legacy wholesale fuel distribution business.
“Creation of this MLP gives us 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 Susser, president and CEO of Susser Holdings. “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 added.
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). 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, the aggregate amount to be raised in the IPO, including the amount and price of the units to be offered, has not yet been determined.
Information regarding the planned offering will be found in a registration statement on Form S-1 that Susser Holdings expects will be filed in the coming days with the U.S. Securities and Exchange Commission. This news does not constitute an offer to sell or the solicitation of an offer to buy common units or other securities of the MLP. Common units of the MLP may not be sold nor may offers be accepted prior to the time the MLP registration statement is filed and is declared effective.
Susser operates over 540 convenience stores in Texas, New Mexico and Oklahoma under the Stripes banner.