- Adds a network of around 280 travel centers,
strategically-located on major highways across US; complementing
bp's US convenience and mobility business.
- $1.3bn cash acquisition within
bp's $16-18bn frame, with acquisition
multiple of around six times based on last 12 months' TravelCenters
EBITDA (4Q21-3Q22)i
- Adds EBITDA immediately, expected to grow to around
$800m by 2025, underpinned by
investment, integration value and synergies
- Expected to deliver over 15% returns and be accretive to free
cash flow per share from 2024.
- Almost doubles bp's global convenience gross margin.
- Brings growth opportunities for 4 of bp's 5 transition growth
engines including convenience, EV charging, biofuels/ renewable
natural gas (RNG) and, later, hydrogen.
HOUSTON, Feb. 16,
2023 /PRNewswire/ -- BP Products North America Inc.,
a wholly-owned indirect subsidiary of BP p.l.c. (NYSE: bp) has
reached an agreement to purchase TravelCenters of America (Nasdaq:
TA), one of the country's leading full-service travel center
operators. The acquisition, which is subject to regulatory and
TravelCenters of America shareholder approval, will be for
$1.3 billion in cash.
TA's strategically-located network of highway sites complements
bp's existing predominantly off-highway convenience and mobility
business, enabling TA and bp to offer fleets a seamless nationwide
service. In addition, bp's global scale and reach will, over time,
bring advantages in fuel and biofuel supply as well as convenience
offers for consumers. It will provide options to expand and develop
new mobility offers including electric vehicle (EV) charging,
biofuels, renewable natural gas (RNG) and later hydrogen, both for
passenger vehicles and fleets.
Convenience is one of bp's five strategic transition growth
engines in which it aims to significantly grow investment through
this decade. By 2030, bp aims for around half its annual investment
to go into these transition growth engines. Over 2023-2030 it aims
that around half of its cumulative $55-65 billion transition growth engine
investment will go into convenience, bioenergy and EV charging.
Bernard Looney, CEO bp, said:
"This is bp's strategy in action. We are doing exactly what we said
we would, leaning into our transition growth engines. This deal
will grow our convenience and mobility footprint across the US and
grow earnings with attractive returns. Over time, it will allow us
to advance four of our five strategic transition growth engines. By
enabling growth in EV charging, biofuels and RNG and later
hydrogen, we can help our customers decarbonize their fleets. It's
a compelling combination."
The acquisition is expected to bring around 280 TravelCenters of
America sites, spanning 44 US states nationwide, into the bp
portfolio. These travel centers, which average around 25 acres,
offer a full range of facilities for vehicles and fleet trucks,
including more than 600 full-service and quick service restaurants,
as well as truck maintenance and repair services. Around 70% of
TA's total gross margin is generated by its convenience services
business, almost double bp's global convenience gross
margin.
Dave Lawler, chairman and
president of bp America: "Subject to approvals, we look forward to
welcoming the TA team to bp. TA's amazing nationwide network
of on-highway locations combined with bp's more than 8,000
off-highway locations have the potential to offer travelers and
professional drivers a seamless experience for decades to
come."
bp yesterday announced plans to invest $1bn in EV charging across the US by 2030.
As part of the transaction, TA will enter into amended lease
agreements with Service Properties Trust (NASDAQ: SVC),
establishing long-term real estate access. bp looks forward to
continuing TA's existing strong relationship with SVC.
The acquisition price of $1.3
billion, or $86 per share,
represents a multiple of around 6 times based on last twelve
months' TA EBITDA (4Q21 to 3Q22)[i]. It is expected to
add EBITDA for bp immediately, growing to around $800 million in 2025.
It supports delivery of bp's convenience and EV charging growth
engine target of more than $1.5bn
EBITDA in 2025 and aim for more than $4bn in 2030. bp expects the acquisition to be
accretive to free cash flow per share from 2024 and to deliver a
return of over 15%.
Notes:
- Goldman Sachs & Co. LLC is acting as lead financial adviser
to bp, Robey Warshaw LLP is acting as financial adviser to bp, and
Sullivan & Cromwell LLP is acting as lead legal adviser to
bp.
- Bernard Looney, chief financial
officer Murray Auchincloss and EVP, customers & products
Emma Delaney will host a webcast
presentation to discuss this agreement today, 16 February 2023, at 1600GMT/1100EST.
The webcast will be able to be viewed via:
www.bp.com/en/global/corporate/investors/results-and-presentations/bp-travelcenters-of-america-announcement.html
Further information:
Email: uspress@bp.com
bp press office London,
bppress@bp.com, +44 7831 095541, +44 7919 217511
About bp
bp's ambition is to become a net zero company by 2050 or sooner,
and to help the world get to net zero. bp has a larger economic
footprint in the United States
than anywhere else in the world, investing more than $140 billion and supporting about 245,000 jobs.
For more information on bp in the US, visit www.bp.com/us.
Cautionary Statement
In order to utilize the 'safe harbor' provisions of the United
States Private Securities Litigation Reform Act of 1995 (the
'PSLRA') and the general doctrine of cautionary statements, bp is
providing the following cautionary statement.
This document contains certain forecasts, projections and
forward-looking statements – that is, statements related to future,
not past events and circumstances – with respect to the financial
condition, results of operations and businesses of bp and certain
of the plans and objectives of bp with respect to these items.
These statements are generally, but not always, identified by the
use of words such as 'will', 'expects', 'is expected to',
'targets', 'aims', 'should', 'may', 'objective', 'is likely to',
'intends', 'believes', 'anticipates', 'plans', 'we see' or similar
expressions. In particular, the following, among other statements,
are all forward-looking in nature: expectations in relation to the
completion of the transaction described including the outcome of
regulatory and shareholder approvals and the amount and form of the
consideration; expectations in relation to future services and
offers from TA and bp including in relation to fuel and biofuel
supply as well as convenience offers; expectations that the
transaction will provide bp with options to expand and develop new
mobility offers including electric vehicle charging, biofuels,
renewable natural gas and hydrogen; bp's plans and expectations to
grow its transition growth engines (TGEs) through this decade
including that investment into bp's TGEs will be around half of
bp's total capital expenditure by 2030 and for cumulative capital
expenditure into TGEs to be $55-65
billion over the period 2023-2030; expectations regarding EBITDA
from TA's business, including expectations to grow that EBITDA
through to 2025 underpinned by growth, integration value and
synergies; expectations regarding the delivery of bp's 2025 target
and 2030 aim for combined EBITDA from its convenience and EV
charging TGEs; expectations that the acquisition will be accretive
to free cash flow on a per share basis from 2024; expectations
relating to the transaction's rate of return; expectations in
relation to the impact of the acquisition on bp's convenience gross
margin; plans and expectations regarding the impact of the
transaction on bp's financial frame including expectations for bp's
annual capital expenditure and allocation of that expenditure;
expectations relating to bp's announced plans to invest
$1 billion in EV charging across
the United States by 2030; and
plans and expectations relating to bp's strategy, including bp's
transformation to an integrated energy company.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that will or may occur in the future and are outside
the control of bp. Actual results or outcomes, may differ
materially from those expressed in such statements, depending on a
variety of factors, including the risk factors discussed under
"Risk factors" in bp's Annual Report and Form 20-F 2021 as filed
with the US Securities and Exchange Commission and in any of our
more recent public reports.
Our most recent Annual Report and Form 20-F and other period
filings are available on our website at www.bp.com, or can be
obtained from the SEC by calling 1-800-SEC-0330 or on its website
at www.sec.gov.
i Sourced from TA's November 2022 investor presentation.
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SOURCE bp America