CrossAmerica Partners LP (NYSE:CAPL) Files An 8-K Completion of Acquisition or Disposition of Assets
Item 2.01 Completion of Acquisition or Disposition of Assets
As previously disclosed in a Current Report on Form 8-K filed by CrossAmerica Partners LP (“CrossAmerica” or “the Partnership”) on December 17, 2018, the Partnership entered into an Asset Exchange Agreement (the “Asset Exchange Agreement”) with Circle K Stores Inc., a Texas corporation (“Circle K”), to which the Partnership and Circle K agreed to exchange (i) certain assets of the Partnership related to 56 convenience and fuel retail stores currently leased and operated by Circle K to a master lease that the Partnership previously purchased jointly with or from CST Brands, Inc. (the “master lease properties”) and 17 convenience and fuel retail stores currently owned and operated by the Partnership located in the U.S. Upper Midwest (the “Upper Midwest properties”), for (ii) certain assets of Circle K related to 192 (162 fee and 30 leased) company-operated convenience and fuel retail stores. The transactions contemplated by the Asset Exchange Agreement are to be closed in a series of “tranche” closings, which the Partnership now expects will be completed during the first half of 2020.
Also as previously disclosed in Current Reports on Form 8-K filed by CrossAmerica on May 22, 2019 (the “May 22 Form 8-K”) and on September 5, 2019 (the “September 5 Form 8-K”), the closings of the first two tranches of asset exchanges under the Asset Exchange Agreement occurred on May 21, 2019 (the “First Asset Exchange”) and September 5, 2019 (the “Second Asset Exchange”).
On February 25, 2020, the closing of the third tranche of asset exchanges under the Asset Exchange Agreement occurred (the “Third Asset Exchange”). In this Third Asset Exchange, Circle K transferred to the Partnership ten (all fee) U.S. company-operated convenience and fuel retail stores having an aggregate value of approximately $11.0 million, and the Partnership transferred to Circle K the real property for five of the master lease properties having an aggregate value of approximately $10.3 million.
In connection with the closing of the Third Asset Exchange, the stores transferred by Circle K were dealerized as contemplated by the Asset Exchange Agreement and Circle K’s rights under the dealer agreements and agent agreements that were entered into in connection therewith were assigned to the Partnership. As previously disclosed in the Partnership’s May 22 Form 8-K, the store locations acquired by the Partnership in the Third Asset Exchange will be covered by the Sub-Jobber Agreement entered into upon the closing of the First Asset Exchange (the “Sub-Jobber Agreement”).
Relationship between the Parties. Circle K and the Partnership are no longer related parties since November 19, 2019, when subsidiaries of Dunne Manning Partners LLC purchased from subsidiaries of Circle K: 1) 50% of the membership interests in the sole member of the General Partner; 2) 50% of the IDRs issued by the Partnership; and 3) an aggregate of 7,486,131 common units of the Partnership. Joseph V. Topper, Jr. is the founder and, since November 19, 2019, chairman of the Board. See the Current Report on Form 8-K filed by CrossAmerica on November 21, 2019. Circle K and the Partnership have entered into real property leases and fuel supply agreements, among others. For more information about the relationship between the Partnership and Circle K, see the description thereof included in Part III, Item 13, “Certain Relationships and Related Party Transactions, and Director Independence” in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2018.
The terms of the Sub-Jobber Agreement were unanimously approved by the conflicts committee (the “Conflicts Committee”) of the board of directors of the General Partner in December 2018 at the time when the terms of the Asset Exchange Agreement were approved. The Conflicts Committee, which is composed of the independent members of the board of directors of the General Partner, retained independent legal and financial advisors to assist in evaluating and negotiating the terms of the Sub-Jobber Agreement. Upon the recommendation of the Conflicts Committee, the board of directors of the General Partner subsequently approved the terms of the Sub-Jobber Agreement.
Item 2.02 Results of Operations and Financial Condition.
On February 25, 2020, the Partnership issued a press release announcing the financial results for CrossAmerica for the quarter and year ended December 31, 2019. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Furnished herewith as Exhibit 99.2 are slides that senior management of CrossAmerica will utilize in CrossAmerica’s 2019 fourth quarter and year-end earnings call. The slides are available on the Webcasts & Presentations page of CrossAmerica’s website at www.crossamericapartners.com.
The information in this Current Report on Form 8-K is being furnished to Regulation FD. The information in Item 2.02 and Exhibits 99.1 and 99.2 of Item 9.01 of this report, according to general instruction B.2., shall not be deemed “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any registration statement to the Securities Act of 1933, as amended. By furnishing this information, the Partnership makes no admission as to the materiality of such information that the Partnership chooses to disclose solely because of Regulation FD.
Safe Harbor Statement
Statements contained in the exhibits to this report that state the Partnership’s or its management’s expectations or predictions of the future are forward-looking statements. It is important to note that the Partnership’s actual results could differ materially from those projected in such forward-looking statements. Factors that could affect those results include those mentioned in the documents that the Partnership has filed with the Securities and Exchange Commission (the “SEC”). The Partnership undertakes no duty or obligation to publicly update or revise the information contained in this report, although the Partnership may do so from time to time as management believes is warranted. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
CrossAmerica Partners LP Exhibit
EX-99.1 2 capl-ex991_6.htm EX-99.1 EARNINGS RELEASE Q4-19 capl-ex991_6.htm Exhibit 99.1 CrossAmerica Partners LP Reports Fourth Quarter and Year-End 2019 Results – Reported Fourth Quarter 2019 Operating Income of $9.4 million and Net Income of $4.3 million compared to Operating Income of $15.5 million and Net Income of $7.7 million for the Fourth Quarter 2018 – Generated Fourth Quarter 2019 Adjusted EBITDA of $25.6 million and Distributable Cash Flow of $18.8 million,…
To view the full exhibit click here
About CrossAmerica Partners LP (NYSE:CAPL)
CrossAmerica Partners LP is a limited partnership engaged in the wholesale distribution of motor fuel, and the ownership and leasing of real estate used in the retail distribution of motor fuel. The Company operates in two segments: wholesale and retail. The Company’s sites are located in Pennsylvania, New Jersey, Ohio, New York, Massachusetts, Kentucky, New Hampshire, Maine, Florida, Maryland, Delaware, Tennessee, Virginia, Illinois, Indiana and West Virginia. The Company also distributes motor fuel in Georgia and North Carolina. It distributes motor fuels at approximately 1,100 sites located in over 20 states. In addition, the Company, through One Stop convenience stores network, owns over 40 stores in Charleston, West Virginia. The Company purchases branded and unbranded motor fuel from integrated oil companies, refiners and unbranded fuel suppliers. It owns or leases and operates convenience stores and retains all profits from motor fuel and convenience store operations.
