“With a total portfolio of more than 750 gas stations post-acquisition, our combined gasoline distribution, gasoline station, and related convenience store business will provide a strong, stable source of cash flow and further establishes Global Partners as one of the leading gasoline wholesalers, distributors and operators in the Northeast. As we have noted in the past, our Board of Directors reviews the distribution on a quarter-by-quarter basis. We expect that the Board will evaluate our distribution next year in light of the earnings power of this transaction as well as the outlook for our other businesses,” Slifka said.The terms of the transaction were unanimously approved by the Board of Directors of Global GP LLC, based on the unanimous approval and recommendation of the Board’s conflicts committee, which is composed entirely of independent directors. The conflicts committee engaged Evercore Partners to act as its financial advisor and Richards, Layton & Finger, P.A. to act as its legal advisor. The closing of the transaction is subject to the satisfaction of a number of conditions, including but not limited to the expiration of the termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Subject to the satisfaction of the conditions in the definitive agreement, the Partnership anticipates that the closing of this transaction will occur in the first quarter of 2012. In preparation for the closing of the transaction, Global Partners plans to increase the acquisition tranche of its revolving credit facility by approximately $100 million. Upon closing, Alliance President Andrew Slifka will join Global Partners as president of the Partnership’s retail business, including its existing Mobil assets. In addition, he will become a member of the Board of Global GP LLC. “We value the financial and operational growth that Alliance has enjoyed under Andrew’s leadership, as well as the excellent work that he and his management team have done in managing the day-to-day operations of our Mobil retail gas stations. Over the past 15 years, Alliance has created an outstanding asset base in the Northeast through acquisitions and organic growth, and we expect to build on that success,” Slifka said.
Of the 542 Alliance stations, 234 are located in Connecticut, 109 in Massachusetts, 67 in Pennsylvania, 48 in Maine, 46 in New Hampshire, 23 in New York, 12 in Rhode Island, two in Vermont and one in New Jersey. Of the owned and leased sites, Alliance operates 81 of the stations and 176 are operated by dealers and commissioned agents. The remaining 285 sites are gasoline supply contract arrangements. Of the 81 Alliance-operated stores, most of the stations have convenience stores and feature co-branding arrangements with national retail chains such as Dunkin’ Donuts and Subway. Alliance’s maintenance capital expenditures are approximately $4 million annually.“We look forward to welcoming the Alliance team to the Global family and continuing to build our businesses together,” Slifka said. Conference Call Information Management will discuss this announcement in a teleconference call for analysts and investors before the market opens today. Time: 9:00 a.m. ET
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