TravelCenters of America Under New Ownership – Oil Giant BP’s Newest Acquisition

BP Products North America, a division of London-based British Petroleum, is acquiring TravelCenters of America in a $1.3 billion ($86 per share) deal announced on Feb. 16. The transaction expands BP’s fueling station and off-highway convenience store network to include TravelCenters’ 281 locations across 44 states, operating principally under the TA, Petro Stopping Centers, and TA Express brands. The deal remains subject to shareholder approvals. BP CEO Bernard Looney said the agreement is “strategy in action,” growing their convenience and mobility footprint across the U.S. with attractive returns.

He added, “Over time, it will allow us to advance four of our five strategic transition growth engines. By enabling growth in EV charging, biofuels, RNG, and later hydrogen, we can help our customers decarbonize their fleets.” Last month TA (Westlake, Ohio) teamed with Electrify America to install EV charging stations.

Jonathan Pertchik, CEO of TA, said, “Today’s announcement that BP is acquiring TA for $86 per share is a result of our successful turnaround and strategic plans. Last month, TA signed 30 franchise agreements and opened 3 franchise sites, with 20 more planned for this year, plus 7 existing travel centers operating as TA or Petro locations. Dave Lawler, chairman and president of BP America, said, “TA’s network combined with BP’s 8,000 off-highway locations offer travelers and drivers a seamless experience.” BP expects the acquisition to deliver 15%+ returns and bolster earnings in 2024.

TravelCenters of America (TA) was priced at a 6x multiple based on its EBITDA over the last 12 months, an 84% premium to the 30-day avg—trading price. TA’s board unanimously approved the deal following several quarters of improved operating performance. In its most recent results (Nov.), 3Q net income & revenue rose & fuel gross margin per gallon increased to 22.7 cents from 18.1 cents. Total fuel volume was down 0.5%, but diesel sold increased by 1% & gasoline sold fell 11.3%.

Sources: https://www.ttnews.com/articles/oil-giant-bp-acquires-travelcenters-america