7-Eleven Just Bought Every Speedway Gas Station For $21B

7-Eleven Just Bought Every Speedway Gas Station For $21B

7-Eleven, Inc. Transforms U.S. Store Network with Acquisition of Speedway

Largest Acquisition in Industry History Expands 7 – Eleven, Inc. stores to approximately 14,000 locations in the United States and Canada, supporting the company’s growth strategy

The purchase price reflects a pro forma EBITDA multiple of 7.1x, including $ 475 million to $ 575 million in fixed rate synergies, $ 3 billion in tax benefits and other impacts

IRVING, Texas, Aug.2, 2020 / PRNewswire / – 7 – Eleven, Inc. (“7 – Eleven”), the biggest name and chain in the convenience retail industry, is pleased to announce that ‘it has entered into an agreement to acquire Speedway, a leading convenience store chain, from Marathon Petroleum Corp. (NYSE: MPC). As part of the deal, 7 – Eleven will acquire approximately 3,900 Speedway stores located in 35 states, for $ 21 billion in cash.

“This acquisition is the largest in the history of our company and will allow us to continue to develop and diversify our presence in the United States, particularly in the Midwest and the East Coast,” said Joe DePinto, President and CEO from the management of 7 – Eleven. “By adding these great locations to our portfolio, 7-Eleven will have the potential to bring more convenience than ever to more customers.”

Strategic and financial justification

Accelerates 7 – Eleven’s growth trajectory and diversifies its presence on U.S. Speedway, and 7 – Eleven has complementary geographic footprints with little overlap. 7 – Eleven currently has over 9,800 stores in the United States and Canada and with Speedway’s high-quality portfolio of approximately 3,900 stores, this acquisition will bring the total number of 7 – Eleven stores to approximately 14,000 in the United States. United and Canada. As a result of the transaction, 7 – Eleven will have a presence in 47 of the 50 most populous metropolitan areas in the United States, positioning the company as an undisputed industry leader in a fragmented industry with favorable macroeconomic trends.

Strengthens the financial profile to position the business for continued success. Speedway, with an annual pre-synergy EBITDA of approximately $ 1.5 billion prior to the acquisition, is an exceptional company offering significant opportunities for future growth. 7 – Eleven expects to realize $ 475 million to $ 575 million in fixed rate synergies in the third year after closing, while maintaining financial flexibility and a strong balance sheet. At close, 7 – Eleven will be even better positioned to continue to pursue profitable growth opportunities.

The combined store network significantly improves economies of scale. At closing, 7 – Eleven and Speedway will share best practices for delivering products and promotions based on customer demand and continue the legacy of innovation from both companies. Additionally, the merged company will be well positioned to maximize efficiency and optimize relationships with suppliers and business partners.

Commitment to ensure successful integration. 7-Eleven plans to form an Integration Steering Committee with management representatives from 7 – Eleven and Speedway. The 7 – Eleven brand is delighted to welcome the approximately 40,000 members of the Speedway team to the 7 – Eleven family and to incorporate best practices from both companies.

Commitment to environmental stewardship. 7-Eleven reaffirms and extends the company’s current commitment to important environmental priorities as part of its broader environmental, social and governance (ESG) efforts. Together, the amalgamated company will set common and shared goals for 2027 to reduce CO2 emissions, use greener packaging and more sustainable food supplies, and reduce the use of plastic. All of these measures will work together to increase business value over the long term.

Compelling financial impact. On a pro forma basis, the transaction reflects an attractive EBITDA multiple of 7.1x after taking into account the expected impacts of the transaction, including $ 475 million to $ 575 million in turnover rate synergies, 3 billion $ in tax benefits and $ 5 billion in ongoing net sale-leaseback. The transaction is expected to produce a compound annual growth in operating income and EBITDA of 7 – Eleven of over 15% in the first three years following the closing of the acquisition. 7 – Eleven expects to reduce its debt to EBITDA ratio to less than 3.0x within two years of closing the acquisition.
Closure and advisers

The transaction is subject to regulatory approvals and customary closing conditions and is expected to close in the first quarter of 2021.

Nomura Securities International, Inc. and Credit Suisse are acting as financial advisers to 7 – Eleven. Nomura and Credit Suisse both issued a fairness opinion on the board of directors of 7 – Eleven.

Subsidiaries of Credit Suisse and Sumitomo Mitsui Banking Corporation (SMBC) provided committed financing for the acquisition. SMBC and SMBC Nikko also provided financial advisory services to Seven & i Holdings Co., Ltd. regarding funding.

Marathon Petroleum Corp. Announces deal to sell $ 21 billion Speedway

– 7-Eleven to Acquire Speedway in $ 21 Billion Cash Deal

– The estimated after-tax cash proceeds of $ 16.5 billion should be used to strengthen the balance sheet and return capital to shareholders

– Establishes relationship with 7-Eleven anchored in long term fuel supply agreements for approximately 7.7 billion gallons per year, with additional growth opportunities

FINDLAY, Ohio, Aug.2, 2020 / PRNewswire / – Marathon Petroleum Corp. (NYSE: MPC) announced today that it and certain of its subsidiaries have entered into a definitive agreement with 7-Eleven, Inc., a wholly-owned company, an indirect subsidiary of Seven & i Holdings Co., Ltd. (3382: Tokyo), through which 7-Eleven will acquire Speedway for $ 21 billion in cash. The transaction is expected to close in the first quarter of 2021, subject to customary closing conditions and regulatory approvals.

“This transaction marks an important milestone in the strategic priorities we outlined earlier this year,” said Michael J. Hennigan, President and CEO. “Our announcement crystallizes the significant value of the Speedway business, creates certainty around value realization and delivers on our commitment to unleash the value of our assets. At the same time, establishing a long-term strategic relationship with 7 -Eleven creates opportunities. To improve our business performance. “

Strategic rationale:

Certainty of MPC Shareholder Value: The $ 21 billion valuation represents a significant unlock of value. The 100% cash transaction immediately captures the value for MPC’s shareholders against the potential valuation risks of other alternatives.

Significant after-tax cash proceeds: This transaction is expected to result in approximately $ 16.5 billion in after-tax cash proceeds. MPC plans to use the proceeds to repay debt to protect its investment grade credit profile and to return capital to shareholders. Specific details will be announced upon closing of the transaction.

Long-Term Relationship Generates Additional Value: The deal includes a 15-year fuel supply agreement for approximately 7.7 billion gallons per year associated with the Speedway business. The company expects additional opportunities over time to supply the remaining 7-Eleven business as existing agreements mature and 7-Eleven adds new locations as part of its announced growth strategy at United States and Canada.

Approvals and timeline
The transaction was approved unanimously by the boards of directors of both companies. The transaction is expected to close in the first quarter of 2021 and is subject to customary closing conditions, including authorization under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

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