Global Partners LP Completes Acquisition of Four Liquid Energy Terminals from Gulf Oil

Rhea-AI Summary

Global Partners LP (GLP) successfully acquires four liquid energy terminals from Gulf Oil, enhancing its presence in the Northeast energy market. With a combined shell capacity of 3.0 million barrels, these terminals will boost Global's storage and distribution capabilities for gasoline, distillates, and ethanol. The strategic acquisition aligns with Global's growth strategy, allowing the company to capitalize on high-demand markets and expand its network.

Insights

Energy Market Analyst

The acquisition of four liquid energy terminals by Global Partners LP represents a strategic consolidation within the energy distribution industry, particularly in the Northeastern United States. By acquiring terminals with a combined shell capacity of approximately 3.0 million barrels, Global Partners is significantly bolstering its storage and distribution capabilities for gasoline, distillates and ethanol.

From an energy market perspective, the expansion is indicative of Global's intent to optimize its supply chain efficiency and responsiveness to market demands. The locations of the terminals suggest a deliberate move to tap into key markets and potentially reduce logistics costs. For instance, the Linden and Woodbury terminals in New Jersey position Global to access the New York Harbor market, a major trading hub for gasoline and distillates, which could lead to improved margins from optimized distribution logistics.

Furthermore, the acquisition price of $212.3 million should be evaluated against the operational cash flow and the potential revenue these assets can generate. It's essential to monitor how this expansion affects Global's balance sheet in the short term and whether the added debt, if any, can be offset by the revenue from operations in these new terminals.

Financial Analyst

From a financial standpoint, the acquisition of these terminals by Global Partners LP is a significant investment that needs to be closely scrutinized for its impact on the company's financial health. The purchase price of $212.3 million should be considered in relation to the company's overall capital allocation strategy and its ability to generate a return on investment that exceeds the cost of capital.

Investors will be interested in how this acquisition will translate into revenue growth and EBITDA margins, given the capital-intensive nature of the energy distribution sector. The divestment of the Revere terminal for $150 million in the previous year and the subsequent reinvestment in these new assets suggest a strategic portfolio rebalancing. It will be important to assess the performance of these new terminals in comparison to the divested assets to determine if the capital reallocation will indeed result in a net positive for the company.

Additionally, the timing of the acquisition could be influenced by current market conditions, including fluctuations in energy prices and demand patterns. The ability of Global Partners to integrate these terminals efficiently and leverage their strategic locations could be a determining factor in the success of this expansion and its reception by the market.

Supply Chain & Logistics Expert

The operational implications of Global Partners LP's acquisition are substantial with regards to supply chain and logistics within the energy sector. The strategic placement of the acquired terminals in the Northeast enhances the company's distribution network, potentially offering a more reliable supply chain to meet customer demands. This could translate into improved delivery times, reduced transportation costs and a fortified supply chain against disruptions.

An integrated network, as mentioned by Global's President and CEO, can lead to economies of scale that benefit the company's operational efficiency. The emphasis on strategic growth and leveraging the network suggests a focus on long-term operational sustainability. The potential for these terminals to open new markets and add gasoline capabilities is pivotal for adapting to regional energy consumption patterns and customer needs.

It will be important to observe how Global integrates these terminals into its existing operations and whether the company can achieve the projected synergies. The ability to enhance competitive advantage through this acquisition will depend on the effective management of these new assets and the seamless integration into the company's broader supply chain strategy.

Global strengthens operations in the Northeast and continues to expand its terminal network

WALTHAM, Mass.--(BUSINESS WIRE)-- Global Partners LP (NYSE: GLP) (“Global” or the “Partnership”) announced today the successful closing of its acquisition of four liquid energy terminals from Gulf Oil Limited Partnership (“Gulf Oil”). The terminals are strategically located in Chelsea, MA, New Haven, CT, Linden, NJ, and Woodbury, NJ, and will further enhance Global’s position in the energy economy of the Northeast.

With a combined shell capacity of approximately 3.0 million barrels, these terminals expand Global’s ability to store and distribute gasoline, distillates, and ethanol. This acquisition aligns with Global’s strategy to acquire and invest in assets that allow the Partnership to leverage scale from its integrated network in high demand markets.

“This acquisition further delivers on our commitment to strategic growth and our ability to identify and capitalize on assets that leverage our growing network,” said Eric Slifka, Global’s President and Chief Executive Officer.

The new terminals are a key fit in Global’s network. Linden, NJ and Woodbury, NJ open new markets while New Haven, CT adds gasoline capabilities to Global’s terminal portfolio in Connecticut, and the Chelsea, MA terminal allows Global to continue to serve the Boston market as it replaces the capabilities of its Revere terminal, which Global strategically divested for $150 million in 2022.

Slifka continued, “We are happy to finalize this acquisition and welcome these terminals into our growing network. These assets will strengthen our existing operations and provide us with new opportunities to serve our customers and enhance our competitive advantage.”

Global purchased the four terminals for $212.3 million.

About Global Partners LP

Building on a legacy that began more than 90 years ago, Global Partners has evolved into a Fortune 500 company and industry-leading integrated owner, supplier, and operator of liquid energy terminals, fueling locations, and guest-focused retail experiences. Global operates or maintains dedicated storage at 49 liquid energy terminals—with connectivity to strategic rail, pipeline, and marine assets—spanning from Maine to Florida and into the U.S. Gulf States. Through this extensive network, the company distributes gasoline, distillates, residual oil, and renewable fuels to wholesalers, retailers, and commercial customers. In addition, Global owns, supplies, and operates more than 1,700 retail locations across 12 Northeast states, the Mid-Atlantic, and Texas, providing the fuels people need to keep them on the go at their unique guest-focused convenience destinations. Recognized as one of Fortune’s Most Admired Companies, Global Partners is embracing progress and diversifying to meet the needs of the energy transition.

Global, a master limited partnership, trades on the New York Stock Exchange under the ticker symbol “GLP.” For additional information, visit www.globalp.com.

Forward-looking Statements

Certain statements and information in this press release may constitute “forward-looking statements.” The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could” or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on Global’s current expectations and beliefs concerning future developments and their potential effect on the Partnership. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting the Partnership will be those that it anticipates. Forward-looking statements involve significant risks and uncertainties (some of which are beyond the Partnership’s control) including, without limitation, uncertainty around the timing of an economic recovery in the United States which will impact the demand for the products we sell and the services that we provide, and assumptions that could cause actual results to differ materially from the Partnership’s historical experience and present expectations or projections. We believe these assumptions are reasonable given currently available information. Our assumptions and future performance are subject to a wide range of business risks, uncertainties and factors, which are described in our filings with the Securities and Exchange Commission (SEC).

For additional information regarding known material factors that could cause actual results to differ from the Partnership’s projected results, please see Global’s filings with the SEC, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Global undertakes no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240409271074/en/

Investors Contact:

Gregory B. Hanson

Chief Financial Officer

Global Partners LP

781-894-8800

GLP@investorrelations.com

Media Contact:

Catie Kerns

SVP Corporate Affairs and Sustainability

Global Partners LP

781-894-8800

media@globalp.com

Source: Global Partners LP

FAQ

What terminals did Global Partners LP (GLP) acquire from Gulf Oil?

Global Partners LP acquired terminals in Chelsea, MA, New Haven, CT, Linden, NJ, and Woodbury, NJ from Gulf Oil.

What is the combined shell capacity of the acquired terminals by Global Partners LP (GLP)?

The acquired terminals have a combined shell capacity of approximately 3.0 million barrels.

How much did Global Partners LP (GLP) pay for the four terminals?

Global Partners LP paid $212.3 million for the acquisition of the four terminals.

What strategic benefits does the acquisition of the terminals bring to Global Partners LP (GLP)?

The acquisition allows Global Partners LP to strengthen its operations, expand its network, serve new markets, and enhance its competitive advantage.