7-Eleven Inc. is poised to grow its North American store count by nearly 40% with its acquisition of approximately 3,900 Speedway convenience stores and gas stations in the U.S. from Marathon Petroleum Corporation (MPC). 7‑Eleven currently operates more than 9,800 corporate and franchised stores in the U.S. and Canada.
The $21 billion cash price “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,” according to a 7-Eleven release. The transaction is expected to close in Q1 2021.
7-Eleven Inc. is the North American subsidiary of Seven & i Holdings Co., Ltd. of Japan. The parent company noted that the combination of the 7-Eleven and Speedway brands will “accelerate the entire group’s long-term growth strategy,” while providing economies of scale, increased product sales, improved gross product margin, a stronger customer base and providing “further innovation and an even greater increase in corporate value.”
According to Reuters, the Canadian convenience store operator Alimentation Couche-Tard and private-equity firm TDR Capital also were vying to buy Speedway.
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Seven & i Holdings had stepped away from negotiations earlier this year but returned to block a competitor from gaining an advantage, according to Bloomberg, which noted that the purchase price was approximately $4 billion to $6 billion higher than analyst expectations.
Joseph DePinto, President of 7-Eleven Inc., said in a conference call that the “disadvantage of not winning this bid would have been other competitors expanding their business,” Bloomberg reported.
