Global Partners Expects Pickup in C-Store Acquisitions in Q4

Retail merger and acquisition activity was “pretty quiet” heading into the fourth quarter, but Global Partners is now “seeing some signs of life,” Gregory Hanson, the company’s chief financial officer, said Friday during a call discussing third-quarter financial results.

“We have seen a pickup on the retail side,” Hanson said. “On the terminal side of the business, the company continues to look at opportunities.”

Global, which has been active in M&A across its retail, wholesale and terminal businesses, reported a decline in its retail store number year to year.

At the end of the third quarter, the company had a network of 1,540 sites, down 49 from the same period last year. The site count excludes the 67 sites it operates or supplies under its Spring Partners retail joint venture with ExxonMobil.

“We went through a pretty big optimization program on our sites last year,” Hanson said. “In the last 12 months, we’ve sold seven sites, we’ve converted 15 sites and then we terminated some of our dealer relationships that were low margin.”

He said Global is “pretty happy” with its portfolio now.

“When we look at the quarter, we were pretty happy with this summer, how the c-stores did. We were actually up year over year, and that’s not even adjusting for same-site [merchandise sales],” Hanson said. “We were down 16 company-operated sites year over year.”

Because of the lower site count, Global’s gasoline distribution and station operations fuel volume declined to 390.8 million gal in Q3, versus 412.7 million gal during the third quarter last year.

But the company’s total fuel volume was 1.9 billion gal in the third quarter, up from 1.7 billion gal last year. Its wholesale fuel volume was 1.4 billion in Q3, up from 1.2 billion gal a year ago. Commercial segment volume was 149.2 million gal during the quarter, compared with 122.6 million gal a year ago.

Rack-to-retail fuel margins during the quarter were 37cts/gal, down 7% from a year ago, but remained “historically strong,” the company said.

Other highlights from the call include:

–The company is using a new loyalty platform offering a “seamless personalized experience.”

–Global recently expanded its marine fuel supply operations into the port of Houston. Today, its bunkering business centers on the Northeast, but it now has extended that business into the Gulf Coast, Chief Executive Eric Slifka said.

–Reporting by Donna Harris, dharris@opisnet.com; Editing by Michael Kelly,
mkelly@opisnet.com