Sunoco's Strategic Moves: $1B 7-Eleven Deal, European Terminals Acquisition, Growth Focus
Portfolio Pulse from Lekha Gupta
Sunoco LP (NYSE:SUN) has agreed to sell 204 convenience stores to 7-Eleven for approximately $1 billion, with adjustments for fuel and merchandise inventory. The deal includes an amendment to Sunoco's existing fuel supply agreement with 7-Eleven, promising additional fuel gross profit. Proceeds will be used to reduce leverage and fund growth, with the sale expected to close after regulatory approvals. Sunoco also plans to acquire Zenith Energy's terminals in Amsterdam and Bantry Bay, which is expected to close in Q1 2024 and be accretive to unitholders in the first year. The acquisition will be funded through Sunoco's credit facility. Sunoco reaffirmed its FY24 EBITDA guidance of $975 million to $1 billion. SUN shares rose 1.7% to $59.05.
January 11, 2024 | 5:21 pm
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Sunoco LP has announced a $1 billion sale of 204 stores to 7-Eleven and the acquisition of Zenith Energy's European terminals, aiming to reduce leverage and focus on growth. The company reaffirmed its FY24 EBITDA guidance and saw a 1.7% increase in share price.
The sale of assets to 7-Eleven and the planned acquisition are strategic moves that indicate Sunoco's commitment to growth and financial health, which is typically viewed positively by investors. The reaffirmation of EBITDA guidance provides further confidence in the company's outlook, and the immediate positive reaction in share price suggests a short-term bullish sentiment.
CONFIDENCE 90
IMPORTANCE 85
RELEVANCE 100