Convenience chain 7‑Eleven, owned by Seven & I Holdings, will acquire Speedway from Marathon Petroleum Corp. for $21 billion in cash along with approximately 3,900 Speedway convenience stores located across 35 states.
"This acquisition is the largest in our company's history and will allow us to continue to grow and diversify our presence in the U.S., particularly in the Midwest and East Coast," said Joe DePinto, president and CEO of 7‑Eleven. "By adding these quality locations to our portfolio, 7‑Eleven will have the opportunity to bring convenience to more customers than ever before."
Speedway and 7‑Eleven have complementary geographic footprints with little overlap. The acquisition will boost 7‑Eleven’s 9,800 stores by 40% to a total of approximately 14,000 stores in the U.S. and Canada. Following the transaction, 7‑Eleven will have a presence in 47 of the top 50 most populated metro areas in the U.S. The transaction is expected to be completed in the first quarter of 2021.
Upon closing, 7‑Eleven and Speedway will share best practices to deliver products and promotions based upon customer demand and continue both companies' legacy of innovation. In addition, the combined company will be well-positioned to maximize efficiencies and optimize relationships with vendors and business partners.
7‑Eleven will welcome the approximately 40,000 members of the Speedway team and plans to form an integration steering committee with representatives from the leadership of both 7–Eleven and Speedway.
7‑Eleven expects to achieve $475 million to $575 million of run-rate synergies through the third year following closing, while maintaining financial flexibility and a strong balance sheet. On a pro forma basis, the transaction reflects an EBITDA multiple of 7.1x after taking into account expected impacts from the transaction, including the run-rate synergies, $3 billion of tax benefits and $5 billion of net sale leaseback proceeds. The transaction is expected to produce compound annual growth in 7–Eleven's operating income and EBITDA of over 15% through the first three years following the close of the acquisition. 7‑Eleven expects to reduce its debt-to-EBITDA ratio to less than 3.0x within two years following the close of the acquisition.
Nomura Securities International, Inc. and Credit Suisse are acting as 7‑Eleven's financial advisors. Both Nomura and Credit Suisse provided 7‑Eleven's Board of Directors with a fairness opinion.
Affiliates of Credit Suisse and Sumitomo Mitsui Banking Corporation (SMBC) provided committed financing for the acquisition. SMBC and SMBC Nikko also provided financial advisory services to Seven & i Holdings Co., Ltd. in regards to the financing consideration.
Akin Gump Strauss Hauer & Feld LLP and Nishimura & Asahi are providing legal counsel.