IRVING, Texas, Aug. 2, 2020 /PRNewswire/ -- 7-Eleven,
Inc. ("7-Eleven"), the premier name and largest chain in the
convenience-retailing industry, is pleased to announce it has
entered into an agreement to acquire Speedway, a leading
convenience store chain, from Marathon Petroleum Corp. (NYSE: MPC).
As part of the agreement, 7-Eleven will acquire approximately 3,900
Speedway stores located in 35 states, for $21 billion in cash.
"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," said
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."
Strategic and Financial Rationale
- Accelerates 7-Eleven's growth trajectory and diversifies
presence in the U.S. Speedway and 7-Eleven have
complementary geographic footprints with little overlap. 7-Eleven
currently has over 9,800 stores in the
United States and Canada
and with Speedway's high-quality portfolio of approximately 3,900
stores, this acquisition will bring 7-Eleven's total number of
stores to approximately 14,000 in the U.S. and Canada. Following the transaction, 7-Eleven
will have a presence in 47 of the top 50 most populated metro areas
in the U.S., positioning the company as a clear industry leader in
a fragmented industry with favorable macroeconomic trends.
- Strengthens financial profile to position company for
continued success. Speedway, with annual pre-synergy
run-rate EBITDA of approximately $1.5
billion prior to the acquisition, is an exceptional business
with significant opportunities for future growth. 7-Eleven expects
to achieve $475 million to
$575 million of run-rate synergies
through the third year following closing, while maintaining
financial flexibility and a strong balance sheet. Upon closing,
7–Eleven will be even better positioned to continue to pursue
profitable growth opportunities.
- Combined store network significantly enhances economies
of scale. Upon closing, 7-Eleven and Speedway will
share best practices to deliver products and promotions based upon
customer demand and continue both companies' legacy of innovation.
In addition, the combined company will be well-positioned to
maximize efficiencies and optimize relationships with vendors and
business partners.
- Commitment to ensuring a successful
integration. 7-Eleven plans to form an integration
steering committee with representatives from the leadership of both
7–Eleven and Speedway. Brand 7-Eleven looks forward to welcoming
the approximately 40,000 members of the Speedway team into the
7-Eleven family and integrating best practices of both
companies.
- Commitment to environmental
stewardship. 7-Eleven reaffirms and expands the
company's existing commitment to important environmental priorities
as a part of its broader Environmental, Social and Governance (ESG)
efforts. Together, the combined company will set mutual and shared
2027 targets to reduce CO2 emissions, to utilize more ecofriendly
packaging and sustainable food supplies, and to drive reduction in
plastic usage. All of these measures will work together to enhance
long-term corporate value.
- Compelling financial impact. On a pro forma
basis, the transaction reflects an attractive EBITDA multiple of
7.1x after taking into account expected impacts from the
transaction, including $475 million
to $575 million of run-rate
synergies, $3 billion of tax benefits
and $5 billion of net sale leaseback
proceeds. The transaction is expected to produce compound annual
growth in 7–Eleven's operating income and EBITDA of over 15%
through the first three years following the close of the
acquisition. 7-Eleven expects to reduce its debt-to-EBITDA ratio to
less than 3.0x within two years following the close of the
acquisition.
Closing and Advisors
The transaction is subject to customary regulatory approvals and
closing conditions and is expected to be completed in the first
quarter of 2021.
Nomura Securities International, Inc. and Credit Suisse are
acting as 7-Eleven's financial advisors. Both Nomura and Credit
Suisse provided 7-Eleven's Board of Directors with a fairness
opinion.
Affiliates of Credit Suisse and Sumitomo Mitsui Banking
Corporation (SMBC) provided committed financing for the
acquisition. SMBC and SMBC Nikko also provided financial advisory
services to Seven & i Holdings Co., Ltd. in regards to the
financing consideration.
Akin Gump Strauss Hauer & Feld LLP and Nishimura & Asahi
are providing legal counsel.
About 7-Eleven, Inc.
7–Eleven, Inc. is the premier name and largest chain in the
convenience-retailing industry. Based in Irving, Texas, 7–Eleven operates, franchises
and/or licenses more than 71,100 stores in 17 countries, including
approximately 11,800 in North
America. Known for its iconic brands such as Slurpee®, Big
Bite® and Big Gulp®, 7–Eleven has expanded into high-quality
sandwiches, salads, side dishes, cut fruit and protein boxes, as
well as pizza, chicken wings and mini beef tacos. 7–Eleven offers
customers industry-leading private brand products under the
7-Select™ brand including healthy options, decadent treats and
everyday favorites, at an outstanding value. Customers can earn and
redeem points on various items in stores nationwide through its
7Rewards® loyalty program, place an order in the 7NOW® delivery app
in 28 participating markets, or rely on 7-Eleven for bill payment
service, self-service lockers and other convenient services. Find
out more online at www.7-Eleven.com, via the 7Rewards customer
loyalty platform on the 7-Eleven mobile app, or on social media at
Facebook, Twitter and Instagram.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/7-eleven-inc-transforms-its-us-store-network-through-acquisition-of-speedway-301104406.html
SOURCE 7-Eleven, Inc.