TravelCenters of America, the Westlake, Ohio-based truck stop operator, on Thursday said it has agreed to be sold to the North American subsidiary of the British oil giant BP plc for $16 per share, or $1.3 billion.
The deal is subject to shareholder approval but represents an acquisition multiple of six times trailing 12 months EBITDA, or earnings before interest, taxes, depreciation and amortization.
TravelCenters (TA) is a major operator of restaurants, with some 278 facilities across the country under three brands: TA, TA Express and Petro Stopping Centers. Those facilities operate more than 450 restaurants and more than 150 full-service restaurants, in addition to other services such as retail and petroleum sales. About 70% of the company's profit margin is generated by its convenience store business.
Restaurants generated $87.5 million in revenue in the third quarter, up 9.5% over the past year. It operates 19 quick-service brands such as Arby's, A&W, Dairy Queen, Starbucks and Burger King. Full-service brands include IHOP, Black Bear Diner and concepts such as Iron Skillet.
TA’s strategically located network of highway sites complements bp’s existing predominantly off-highway convenience and mobility business, enabling TA and bp to offer fleets a seamless nationwide service, it said. In addition, BP's global scale and reach will, over time, bring advantages in fuel and biofuel supply as well as convenience offers for consumers, said the company. It will provide options to expand and develop new mobility offers including electric vehicle (EV) charging, biofuels, renewable natural gas (RNG) and later hydrogen, both for passenger vehicles and fleets.
“This is BP's strategy in action,” said Bernard Looney, CEO of London-based bp. “We are doing exactly what we said we would, leaning into our transition growth engines. This deal will grow our convenience and mobility footprint across the U.S. and grow earnings with attractive returns. Over time, it will allow us to advance four of our five strategic transition growth engines. By enabling growth in EV charging, biofuels and RNG and later hydrogen, we can help our customers decarbonize their fleets. It’s a compelling combination.”
Dave Lawler, chairman and president of BP America, Chicago, said, “Subject to approvals, we look forward to welcoming the TA team to bp. TA's amazing nationwide network of on-highway locations combined with bp's more than 8,000 off-highway locations have the potential to offer travelers and professional drivers a seamless experience for decades to come.”
As part of the transaction, TA will enter into amended lease agreements with Service Properties Trust, establishing long-term real estate access, and bp looks forward to continuing TA’s existing strong relationship with SVC.
Jonathan Maze contributed to this report.
This story was reprinted from Restaurant Business sister publication CSP Daily News.
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