DALLAS and HOUSTON, July 15,
2015 /PRNewswire/ -- Energy Transfer Partners, L.P. (NYSE:
ETP) and Sunoco LP (NYSE: SUN) announced today the dropdown of 100%
of Susser Holdings Corp. (SHC) for approximately $1.94 billion. In addition, there will be an
exchange for 11 million SUN units owned by SHC for another 11
million new SUN units to a subsidiary of ETP.
For the SHC dropdown, SUN will pay to ETP approximately
$970 million in cash and issue
approximately 22 million SUN units valued at approximately
$970 million based on the five-day
volume-weighted average price of SUN's common units as of
July 14, 2015. Pro forma for this
transaction, ETP will remain the largest unitholder of SUN. The
amount of SUN units being issued to ETP in this transaction
reflects ETP's continued confidence in SUN's business and future
growth prospects.
The timing of this dropdown transaction is driven by the desire
to accelerate SUN's exposure to the fast growing retail business
with its exciting backlog of organic growth opportunities and
strong EBITDA performance. The size of this transaction reflects
the structural simplicity of a single drop of a corporate entity
into SUN and ultimately its wholly-owned corporate subsidiary,
Susser Petroleum Property Co. LLC ("PropCo").
For ETP, this transaction is expected to be immediately
accretive to distributable cash flow for 2015 and beyond. For SUN,
the transaction is breakeven with respect to distributable cash
flow in 2015 and significantly accretive thereafter.
SHC's operations consist primarily of retail activity through
the operation of convenience stores in Texas, New
Mexico and Oklahoma,
offering merchandise, food service, motor fuel and other
services. The company operates retail stores under the
proprietary Stripes® convenience store brand.
For SUN, the addition of significant size and scale will deliver
new organic growth opportunities and enhance its ability to focus
on a broad range of third-party acquisition opportunities. The
dynamic EBITDA growth at SHC creates a strong runway for increasing
distributable cash flow beginning in 2016.
Simultaneously with this transaction, ETP and Energy Transfer
Equity (NYSE: ETE) have announced a transaction in which ETP will
transfer the GP interest and incentive distribution rights (IDRs)
of SUN to ETE in exchange for 21 million ETP units held by
ETE. ETE has also agreed to a 2-year IDR subsidy ($35 million per annum) to ETP through
June 30, 2017, which replaces an
existing, $35 million per annum
subsidy that, as agreed between ETE and ETP in connection with the
original SHC merger, would automatically terminate in the event
that ETP transfers the SUN GP interest and IDRs to ETE. The
transaction represents a current value of approximately
$1.2 billion. When viewed together,
these transactions are a strong endorsement by ETE and ETP of SUN's
current and future success and a validation of its business
strategy and model.
For ETP, the SUN LP units -- at their current price, implied
yield, and built-in anticipated distribution growth profile --
represent a very attractive currency. When combined with the almost
$1 billion of upfront cash to help
fund ETP's robust capital program, which allows ETP to avoid a like
amount of equity issuances, the overall transaction becomes very
compelling for ETP.
All of the income from SHC will be non-qualifying income to SUN
and therefore SHC will be immediately contributed to PropCo. SUN
anticipates that cash taxes at PropCo going forward will be
minimal.
The transaction is expected to close on August 1, subject to customary closing
conditions. The approximately 22 million SUN units to be received
by ETP as part of the SHC transaction will not receive
2nd quarter 2015 distributions from SUN. Following the
GP/IDR exchange, ETP will deconsolidate SUN for accounting
purposes, and as a result, SUN will consolidate up through ETE's
financial statements.
Tudor, Pickering, Holt & Co. acted as financial advisor to
the ETP conflicts committee. Akin Gump Strauss Hauer & Feld LLP
acted as legal advisor to ETP and Richard
Layton & Finger, P.A. acted as legal advisor to the ETP
conflicts committee.
Perella Weinberg Partners acted as financial advisor to the SUN
special committee. Andrews Kurth LLP acted as legal advisor to SUN
and Potter Anderson & Corroon acted as legal advisor to the SUN
special committee.
For additional information on the transaction and pro forma
financial information, please refer to filings made by SUN and ETP
on Form 8-K with the U.S. Securities and Exchange
Commission.
Sunoco LP (NYSE: SUN) is a master limited partnership
(MLP) that primarily distributes motor fuel to convenience stores,
independent dealers, commercial customers and distributors. SUN
also operates more than 150 convenience stores and retail fuel
sites. SUN conducts its business through wholly owned
subsidiaries, as well as through its 31.58 percent interest in
Sunoco, LLC, in partnership with an affiliate of its parent
company, Energy Transfer Partners (NYSE: ETP). While primarily
engaged in natural gas, natural gas liquids, crude oil and refined
products transportation, ETP also operates a retail business
through its interest in Sunoco, LLC, as well as wholly owned
subsidiaries, Sunoco, Inc. and Stripes LLC that operate
approximately 1,100 convenience stores and retail fuel sites. For
more information, visit the Sunoco LP website at
www.SunocoLP.com.
Energy Transfer Partners, L.P. (NYSE: ETP)
is a master limited partnership owning and operating one of the
largest and most diversified portfolios of energy assets in
the United States. ETP's
subsidiaries include Panhandle Eastern Pipe Line Company, LP (the
successor of Southern Union Company) and Lone Star NGL LLC, which
owns and operates natural gas liquids storage, fractionation and
transportation assets. In total, ETP currently owns and operates
more than 62,000 miles of natural gas and natural gas liquids
pipelines. ETP also owns the general partner, 100% of the incentive
distribution rights, and approximately 67.1 million common units in
Sunoco Logistics Partners L.P. (NYSE: SXL), which operates a
geographically diverse portfolio of crude oil and refined products
pipelines, terminalling and crude oil acquisition and marketing
assets. ETP owns 100% of Sunoco, Inc. and 100% of Susser Holdings
Corporation. Additionally, ETP owns the general partner, 100% of
the incentive distribution rights and approximately 44% of the
limited partner interests in Sunoco LP (formerly Susser Petroleum
Partners LP) (NYSE: SUN), a wholesale fuel distributor and
convenience store operator. ETP's general partner is owned by
Energy Transfer Equity, L.P. (NYSE: ETE). For more information,
visit the Energy Transfer Partners, L.P. web site at
www.energytransfer.com.
Energy Transfer Equity, L.P. (NYSE:ETE) is a master
limited partnership which owns the general partner and 100% of the
incentive distribution rights (IDRs) of Energy Transfer Partners,
L.P. (NYSE: ETP), approximately 23.6 million ETP common units,
approximately 81.0 million ETP Class H Units, which track 90% of
the underlying economics of the general partner interest and IDRs
of Sunoco Logistics Partners L.P. (NYSE: SXL), and 100 ETP Class I
Units. On a consolidated basis, ETE's family of companies owns and
operates approximately 71,000 miles of natural gas, natural gas
liquids, refined products, and crude oil pipelines. For more
information, visit the Energy Transfer Equity, L.P. website at
www.energytransfer.com.
Forward-Looking Statements
This news release contains "forward-looking statements" which
may describe Sunoco LP's ("SUN") and/or Energy Transfer Partners,
L.P.'s ("ETP") objectives, expected results of operations, targets,
plans, strategies, costs, anticipated capital expenditures,
potential acquisitions, new store openings and/or new dealer
locations, management's expectations, beliefs or goals regarding
proposed transactions between ETP and SUN, the expected timing of
those transactions and the future financial and/or operating impact
of those transactions, including the anticipated integration
process and any related benefits, opportunities or synergies.
These statements are based on current plans, expectations and
projections and involve a number of risks and uncertainties that
could cause actual results and events to vary materially, including
but not limited to: execution, integration, environmental and other
risks related to acquisitions (including the SHC drop-down and
future drop-downs) and the Partnerships' overall business strategy;
competitive pressures from convenience stores, gasoline stations,
other non-traditional retailers and other wholesale fuel
distributors located in SUN's and SHC's markets; dangers inherent
in storing and transporting motor fuel; SUN's or SHC's ability to
renew or renegotiate long-term distribution contracts with
customers; changes in the price of and demand for motor fuel;
changing consumer preferences for alternative fuel sources or
improvement in fuel efficiency; competition in the wholesale motor
fuel distribution industry; seasonal trends; severe or unfavorable
weather conditions; increased costs; environmental laws and
regulations; dangers inherent in the storage of motor fuel;
reliance on suppliers to provide trade credit terms to adequately
fund ongoing operations; acts of war and terrorism; dependence on
information technology systems; SUN's and ETP's ability to
consummate any proposed transactions, or to satisfy the conditions
precedent to the consummation of such transactions; successful
development and execution of integration plans; ability to realize
anticipated synergies or cost-savings and the potential impact of
the transactions on employee, supplier, customer and competitor
relationships; and other unforeseen factors. For a full discussion
of these and other risks and uncertainties, refer to the "Risk
Factors" section of SUN's and ETP's most recently filed annual
reports on Form 10-K. These forward-looking statements are based on
and include our estimates as of the date hereof. Subsequent events
and market developments could cause our estimates to change. While
we may elect to update these forward-looking statements at some
point in the future, we specifically disclaim any obligation to do
so, even if new information becomes available, except as may be
required by applicable law.
Contacts
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Sunoco
LP
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Energy Transfer
Partners, L.P.
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Scott
Grischow
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Brent Ratliff, Vice
President, Investor Relations
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Director – Investor
Relations and Treasury
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(214)
981-0700
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(361) 884-2463,
scott.grischow@susser.com
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brent.ratliff@energytransfer.com
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Dennard-Lascar
Associates
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Granado
Communications
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Anne
Pearson
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Vicki
Granado
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(210) 408-6321,
apearson@dennardlascar.com
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(214) 599-8785,
vicki@granadopr.com
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SOURCE Energy Transfer Partners, L.P.; Sunoco LP