Dive Brief:
- Sunoco LP is on track to hit its goal of making $500 million worth of bolt-on acquisitions this year, President and CEO Joseph Kim said during the company’s first-quarter earnings call on Tuesday.
- Kim said that as of Tuesday, Suncoo has about $200 million worth of bolt-on acquisitions “that are either closed or signed are going to be closed in the very near future.” The Dallas-based energy firm and convenience retailer revealed this multiyear growth initiative in January.
- Sunoco has become one of the most acquisitive companies in convenience retail since buying Parkland Cop. for over $9 billion last year.
Dive Insight:
Sunoco has already purchased 140 c-stores through three separate deals in the U.S. since the start of the new year. Those acquisitions have included 36 c-stores in and around South Carolina along with the wholesale business of Pops Mart Fuels, 56 Duck Thru sites around North Carolina and Virginia from Jernigan Oil Company, and 48 sites from Capitol Petroleum Group in New York.
It’s not clear if the $200 million Kim referred to during Tuesday’s call includes any or all of those three deals or if Sunoco has other acquisitions in the works, as the company did not disclose the prices it paid for those pickups. However, it’s becoming increasingly clear that Sunoco — which only had about 76 company-operated convenience retail sites across two states as of late last year — intends to become a competitive c-store threat in the U.S.
Kim told investors and analysts on Tuesday that Sunoco’s bolt-on acquisitions are “immediately accretive” to the business. Combined with the retail and fuel assets it bought from Parkland — which also introduced Sunoco to some new markets — the company is “stronger than at any point” in its history, he added.
“It wasn't too long ago that we were a U.S.-only business, predominantly on the East Coast and in the South,” Kim said. “Now we have investment opportunities in the U.S., Canada, Latin America, greater Caribbean and Europe.”
Sunoco is also beginning to see the financial benefits from the Parkland deal on the fuel side of the business, which was the driving force of the acquisition. According to its earnings report, Sunoco saw increases in adjusted EBITDA for its distribution, terminals and pipeline segments, which were all partially driven by the Parkland acquisition.
