Delek US Holdings Inc. (NYSE:DK), the US arm of Delek Group Ltd. (TASE: DLEKG), controlled by chairman Yitzhak Tshuva, is expanding its operations. Delek US today announced that its wholly owned subsidiary Mapco Express Inc. had bought all of Fast Petroleum, Inc. 43 retail fuel and convenience stores for $46 million.
Delek US said Mapco would own 30 of the properties and assume leases for the remaining 13. The fuel stations are located in northwest Georgia and southeast Tennessee, markets in which Mapco currently operates only one store.
The acquisition will be financed from the proceeds of Delek US’s IPO in May and from the company’s cash. Delek US raised $160 million in its IPO at a company value of $790 million. The company’s current share price is $12.49, representing a market cap of $635.6 million, 20% less than its value at the IPO.
Delek US president and CEO Uzi Yemin said, "We are pleased to announce this definitive agreement, which is consistent with the strategy we stated during our recent initial public offering to continue to expand our concept of the 'neighborhood' convenience store within the Southeast. This transaction is representative of the opportunities we believe exist to implement our strategy to grow in our existing and contiguous markets. Through this transaction, we will substantially expand our market presence in northern Georgia and establish our initial presence in Chattanooga and southeast Tennessee, complementing our leading market positions in Nashville, Tennessee, and northern Alabama.
“We also expect this transaction to be immediately accretive to our financial results. As we have previously demonstrated through the successful integration of four large retail acquisitions and several smaller ones, we intend to assimilate these stores quickly through our initiatives to deliver our culture and programs. In operating these stores under our 'neighborhood' store concept, we will price and stock each store individually to meet the customs and tastes of each community, while taking advantage of our purchasing economies of scale and the marketing, operating and financial resources we enjoy as a large convenience store operator. We also intend to continue evaluating additional opportunities for retail fuel and convenience store acquisitions."
Published by Globes [online], Israel business news - www.globes.co.il - on June 15, 2006
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