Murphy USA is acquiring QuickChek, a convenience store chain based in New Jersey and New York State.
The El Dorado-based company is paying $645 million in an all-cash transaction for QuickChek’s 157 stores. Murphy USA is projecting that the acquisition will have a $625 million net value, adjusting for $20 million in tax benefits, and to have $28 million in synergies within the next three years.
Murphy USA plans to use cash on hand, along with existing credit and new debt, to finance the acquisition. According to a Murphy USA release, the company expects a pro forma total leverage of 2.2x excluding the projected synergies.
The QuickChek chain features a mix of fuel and non-fuel stores with grab-and-go food market items. In a breakdown of QuickChek’s profit margins, the company had $542 million in merchandise sales over the last 12 months, as well as 272 million gallons of fuel sold and EBITDA (earnings before interest, taxes depreciation and amortization) for the last 12 months.
The majority of QuickChek’s stores, or 57 percent, are fuel stores, while 43 percent are non-fuel stores. In the last 12 months, fuel has accounted for 34 percent of QuickChek’s gross profits, while merchandise sales have accounted for 66 percent.
Murphy USA has identified the QuickChek acquisition as one that “provides a platform for accelerating enhanced organic growth” and that provides brand extension/expansion opportunities across its portfolio. QuickChek will give Murphy USA an established real estate team along with a multi-year pipeline of stores that are already under contract. According to a Murphy USA release, there are additional opportunities identified for potential stores.
The acquisition is projected to close in the first quarter of 2021.
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