Business Context and Reporting Period
This Form 8-K Current Report, filed on August 6, 2015, covers the event date of July 31, 2015. Sunoco LP (the "Partnership") completed the acquisition of 100% of the issued and outstanding shares of capital stock of Susser Holdings Corporation (the "Company"). Susser operates retail convenience stores under the Stripes and Sac-N-Pac brands, primarily in Texas, New Mexico, and Oklahoma, offering merchandise, food service, and motor fuel.
Key Financial Metrics and Transaction Details
The filing details the consideration paid for the acquisition of Susser Holdings Corporation:
- Cash Consideration: Approximately $966.9 million, subject to post-closing working capital adjustments.
- Unit Consideration: Issuance of 21,978,980 Class B Units (convertible to common units) plus 79,308 common units and 10,939,436 subordinated units to restore economic benefits for exchanged units.
- Ownership Structure Post-Transaction: Energy Transfer Partners, L.P. (ETP) indirectly owns approximately 50.7% of the Partnership's limited partner interests and 100% of the incentive distribution rights.
The filing does not provide specific revenue, profit, cash flow, or margin figures for Sunoco LP or Susser Holdings Corporation within the text of this report; such data is referenced in incorporated exhibits (Exhibits 99.2, 99.3, and 99.4).
Material Changes
The primary material change is the consolidation of Susser Holdings Corporation into Sunoco LP. Prior to the transaction, Susser indirectly held a 30.7% limited partner interest in Sunoco LP. Upon closing:
- Susser's existing common and subordinated units were exchanged or converted into Class A Units with restricted distribution rights.
- New Class B Units were issued to the contributors, which will convert to common units following the Q2 2015 distribution record date.
- ETP's ownership stake in the Partnership increased to approximately 50.7%.
Guidance, Outlook, and Risks
Management Commentary: A Special Committee of the General Partner's Board evaluated the transaction and received an opinion from an independent financial advisor that the consideration paid was fair from a financial point of view to the Partnership and unaffiliated unitholders.
Unusual Items and Contingencies: The transaction involved complex unit exchanges (Class A and Class B Units) with specific restrictions on voting rights and distribution entitlements. Class A Units are subordinated to common units regarding distributions and do not share in cash derived from Susser Petroleum Property Company LLC (PropCo).
Risks: The filing notes that the description of the Contribution Agreement is qualified by reference to the full text filed as Exhibit 2.1. The financial impact is further detailed in pro forma financial statements filed as Exhibit 99.4.
Investor Verification Checklist
- Verify the final purchase price after post-closing working capital adjustments to the $966.9 million cash consideration.
- Review the Unaudited Pro Forma Combined Financial Statements (Exhibit 99.4) to assess the impact of the acquisition on Sunoco LP's leverage and earnings.
- Confirm the specific distribution rights and conversion timelines for the newly issued Class A and Class B Units.
- Examine the audited and unaudited financial statements of Susser Holdings Corporation (Exhibits 99.2 and 99.3) to evaluate the acquired assets' historical performance.