Sunoco LP (NYSE: SUN) announced on 1 April that it has completed the acquisition of a 31.58% equity interest in Sunoco, LLC, from ETP Retail Holdings, an affiliate of Energy Transfer Partners (NYSE: ETP).
The transaction is valued at approximately USD 816 million. Sunoco LP paid USD 775 million in cash and issued to ETP 795,482 new SUN units valued at USD 40.8 million.
The acquisition was funded using proceeds from the previously announced issuance of senior notes that was also completed on the same day. Sunoco LP issued USD 800 million of 6.375% senior notes due 2023 through a private offering.
The notes were co-issued by Sunoco LP and Sunoco Finance Corp., a wholly owned subsidiary. Net proceeds totaled USD 789.2 million. Sunoco LP also used a small portion of the proceeds to repay outstanding borrowings under its senior secured revolving credit facility.
Sunoco LP is a master limited partnership that primarily distributes 5.3 billion gallons of motor fuels per year to convenience stores, independent dealers, commercial customers and distributors in more than 26 states in the east, midwest and southeast regions of the U.S.A. It also operates more than 100 convenience stores and retail fuel sites. It is majority owned and managed by ETP, which also owns Sunoco Inc. and Stripes LLC.
ETP had indicated it plans to bring Sunoco Inc. and Stripes LLC together under Sunoco LP (formerly Susser Petroleum Partners LP) through a series of asset dropdowns from ETP to Sunoco LP.
“This transaction gives us new exposure to customers in 26 states from Maine to Florida to Louisiana, where the Sunoco fuel brand is very strong, complementing our current base of wholesale customers in the Southwest and Hawaii,” said Robert W. Owens, president and CEO of Sunoco LP.
“We will also enhance our sales channel portfolio with additional jobbers who supply fuel to independent retailers in our mix of customers,” he said.