- Seven & i Holdings Co., Ltd. (OTCMKTS: SVNDY) — which is the largest convenience store franchiser in the world — announced it is buying Speedway gas stations from Marathon Petroleum Corp (NYSE: MPC) for $21 billion
Seven & i Holdings Co., Ltd. (OTCMKTS: SVNDY) — which is the largest convenience store franchiser in the world — announced it is buying Speedway gas stations from Marathon Petroleum Corp (NYSE: MPC) for $21 billion. The deal will be paid in cash and partially financed with debt.
This will also add around 3,900 stores to 9,800 locations that are operated by the 7-Eleven operations of the company. This is one of the biggest deals for Seven & i — which has about 69,000 stores around the world including 7-Eleven outlets and Ito-Yokado supermarkets in Japan. About 3 years ago, Seven & i acquired Sunoco LP gas stations and convenience stores for about $3.3 billion.
“This is a historic first step as we seek to become a global retailer,” said Ryuichi Isaka, President, Executive President and Representative Director of Seven & i Holdings Co., Ltd.
Marathon plans to use $16.5 billion in after-tax proceeds for reducing debt and increasing its dividend payments.
“This acquisition is the largest in our company’s history and will allow us to continue to grow and diversify our presence in the U.S., particularly in the Midwest and East Coast,” commented Joe DePinto, President and Chief Executive Officer of 7-Eleven. “By adding these quality locations to our portfolio, 7-Eleven will have the opportunity to bring convenience to more customers than ever before.”
This is the largest U.S. energy deal of the year. And the deal comes less than a year after Marathon decided to spin-off Speedway.
“Our announcement crystalizes the significant value of the Speedway business, creates certainty around value realization, and delivers on our commitment to unlock the value of our assets,” explained Marathon Chief Executive Michael Hennigan.
On a pro forma basis, this transaction reflects an EBITDA multiple of 7.1x after taking into account expected impacts from the transaction, including $475 million to $575 million of run-rate synergies along with $3 billion of tax benefits and $5 billion of net sale leaseback proceeds.
The deal is expected to produce compound annual growth in 7–Eleven’s operating income and EBITDA of over 15% through the first 3 years following the close of the acquisition. And 7-Eleven expects to reduce its debt-to-EBITDA ratio to less than 3x within two years following the close of the acquisition.
