The acquisition is subject to regulatory and TA shareholder approval, according to a news release.
The transaction was unanimously approved by the TA Board of Directors. Citigroup acted as exclusive financial advisor to TA and Ropes & Gray as TA’s legal advisor in connection with the transaction.
“TA’s network of highway sites will complement BP’s existing off-highway convenience and mobility business, enabling TA and BP to offer fleets a nationwide service.,” the news release stated. “In addition, BP’s global scale and reach is expected to bring advantages in fuel and biofuel supply as well as convenience offers for consumers.”
The purchase will provide options to expand and develop new mobility offers including electric vehicle charging, biofuels, renewable natural gas and later hydrogen, both for passenger vehicles and fleets.
By 2030, BP officials say they are aiming for around half of the company’s annual investment to go into these transition growth engines. Over 2023-30, it aims that around half of its cumulative $55-65 billion transition growth engine investment will go into convenience, bioenergy and EV charging, the news release stated.
“This is BP’s strategy in action,” Bernard Looney, CEO BP, said. “We are doing exactly what we said we would, leaning into our transition growth engines. This deal will grow our convenience and mobility footprint across the US and grow earnings with attractive returns. Over time, it will allow us to advance four of our five strategic transition growth engines. By enabling growth in EV charging, biofuels and RNG and later hydrogen, we can help our customers decarbonize their fleets. It’s a compelling combination.”
The acquisition is expected to bring around 280 TravelCenters of America sites, spanning 44 U.S. states nationwide, into the BP portfolio. These travel centers, which average around 25 acres, offer a full range of facilities for vehicles and fleet trucks, including more than 600 full-service and quick service restaurants, as well as truck maintenance and repair services. Around 70% of TA’s total gross margin is generated by its convenience services business, almost double BP’s global convenience gross margin.
“Subject to approvals, we look forward to welcoming the TA team to BP,” Dave Lawler, chairman and president of BP America, said. “TA’s amazing nationwide network of on-highway locations combined with bp’s more than 8,000 off-highway locations have the potential to offer travelers and professional drivers a seamless experience for decades to come.”
BP announced Feb. 15 that it plans to invest $1 billion in EV charging across the US by 2030.
As part of the transaction, TA will enter into amended lease agreements with Service Properties, establishing long-term real estate access. BP looks forward to continuing TA’s existing strong relationship with SVC.
The acquisition price of $1.3 billion, or $86 per share, represents a multiple of around six times based on last 12 months’ TA EBITDA. It is expected to add EBITDA for BP immediately, growing to around $800 million in 2025.
“Today’s announcement that BP is acquiring TA for $86 per share is a result of the successful implementation of our turnaround and strategic plans,” TA CEO Jonathan M. Pertchik, said. “We have improved our core travel center business, expanded our network, launched eTA to prepare for the future of alternative fuels and improved our operating and financial results, none of which we could have accomplished without the hard work and dedication of our employees at every level.”
It supports delivery of BP’s convenience and EV charging growth engine target of more than $1.5bn EBITDA in 2025 and aim for more than $4bn in 2030. BP expects the acquisition to be accretive to free cash flow per share from 2024 and to deliver a return of over 15%.
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