Energy Transfer Partners and Sunoco LP Announce
Approximately $1.94 Billion Dropdown of Susser
Holdings Corp.
-- Transaction consideration of approximately 50% cash and 50% SUN LP Units
-- Transaction increases SUN's exposure to fast growing retail business
-- Transaction is cash flow breakeven to SUN in 2015 and significantly accretive thereafter while it is immediately
accretive to ETP
-- ETP benefits from almost $1 billion of upfront cash to continue to fund its over $10 billion capital program
through 2016
-- Remaining dropdowns from ETP to SUN likely to be completed by the end of 2016
DALLAS and HOUSTON, July 15, 2015 /PRNewswire/ -- Energy Transfer Partners, L.P. (NYSE: ETP) and Sunoco LP
(NYSE: SUN) announced today the dropdown of 100% of Susser Holdings Corp. (SHC) for approximately $1.94
billion. In addition, there will be an exchange for 11 million SUN units owned by SHC for another 11 million new
SUN units to a subsidiary of ETP.
For the SHC dropdown, SUN will pay to ETP approximately $970 million in cash and issue approximately 22 million
SUN units valued at approximately $970 million based on the five-day volume-weighted average price of SUN's
common units as of July 14, 2015. Pro forma for this transaction, ETP will remain the largest unitholder of SUN. The
amount of SUN units being issued to ETP in this transaction reflects ETP's continued confidence in SUN's business
and future growth prospects.
The timing of this dropdown transaction is driven by the desire to accelerate SUN's exposure to the fast growing
retail business with its exciting backlog of organic growth opportunities and strong EBITDA performance. The size of
this transaction reflects the structural simplicity of a single drop of a corporate entity into SUN and ultimately its
wholly-owned corporate subsidiary, Susser Petroleum Property Co. LLC ("PropCo").
For ETP, this transaction is expected to be immediately accretive to distributable cash flow for 2015 and beyond. For
SUN, the transaction is breakeven with respect to distributable cash flow in 2015 and significantly accretive
SHC's operations consist primarily of retail activity through the operation of convenience stores in Texas, New
Mexico and Oklahoma, offering merchandise, food service, motor fuel and other services. The company operates
retail stores under the proprietary Stripes® convenience store brand.
For SUN, the addition of significant size and scale will deliver new organic growth opportunities and enhance its
ability to focus on a broad range of third-party acquisition opportunities. The dynamic EBITDA growth at SHC
creates a strong runway for increasing distributable cash flow beginning in 2016.
Simultaneously with this transaction, ETP and Energy Transfer Equity (NYSE: ETE) have announced a transaction in
which ETP will transfer the GP interest and incentive distribution rights (IDRs) of SUN to ETE in exchange for 21
million ETP units held by ETE. ETE has also agreed to a 2-year IDR subsidy ($35 million per annum) to ETP through
June 30, 2017, which replaces an existing, $35 million per annum subsidy that, as agreed between ETE and ETP in
connection with the original SHC merger, would automatically terminate in the event that ETP transfers the SUN GP
interest and IDRs to ETE. The transaction represents a current value of approximately $1.2 billion. When viewed
together, these transactions are a strong endorsement by ETE and ETP of SUN's current and future success and a
validation of its business strategy and model.
For ETP, the SUN LP units -- at their current price, implied yield, and built-in anticipated distribution growth profile --
represent a very attractive currency. When combined with the almost $1 billion of upfront cash to help fund ETP's
robust capital program, which allows ETP to avoid a like amount of equity issuances, the overall transaction
becomes very compelling for ETP.
All of the income from SHC will be non-qualifying income to SUN and therefore SHC will be immediately contributed
to PropCo. SUN anticipates that cash taxes at PropCo going forward will be minimal.
The transaction is expected to close on August 1, subject to customary closing conditions. The approximately 22
million SUN units to be received by ETP as part of the SHC transaction will not receive 2nd quarter 2015
distributions from SUN. Following the GP/IDR exchange, ETP will deconsolidate SUN for accounting purposes, and
as a result, SUN will consolidate up through ETE's financial statements.
Tudor, Pickering, Holt & Co. acted as financial advisor to the ETP conflicts committee. Akin Gump Strauss Hauer &
Feld LLP acted as legal advisor to ETP and Richard Layton & Finger, P.A. acted as legal advisor to the ETP conflicts
Perella Weinberg Partners acted as financial advisor to the SUN special committee. Andrews Kurth LLP acted as
legal advisor to SUN and Potter Anderson & Corroon acted as legal advisor to the SUN special committee.
For additional information on the transaction and pro forma financial information, please refer to filings made by
SUN and ETP on Form 8-K with the U.S. Securities and Exchange Commission.
Sunoco LP (NYSE: SUN) is a master limited partnership (MLP) that primarily distributes motor fuel to
convenience stores, independent dealers, commercial customers and distributors. SUN also operates more than
150 convenience stores and retail fuel sites. SUN conducts its business through wholly owned subsidiaries, as well
as through its 31.58 percent interest in Sunoco, LLC, in partnership with an affiliate of its parent company, Energy
Transfer Partners (NYSE: ETP). While primarily engaged in natural gas, natural gas liquids, crude oil and refined
products transportation, ETP also operates a retail business through its interest in Sunoco, LLC, as well as wholly
owned subsidiaries, Sunoco, Inc. and Stripes LLC that operate approximately 1,100 convenience stores and retail
fuel sites. For more information, visit the Sunoco LP website at
Energy Transfer Partners, L.P. (NYSE: ETP) is a master limited partnership owning and operating one of
the largest and most diversified portfolios of energy assets in the United States. ETP's subsidiaries include
Panhandle Eastern Pipe Line Company, LP (the successor of Southern Union Company) and Lone Star NGL LLC,
which owns and operates natural gas liquids storage, fractionation and transportation assets. In total, ETP currently
owns and operates more than 62,000 miles of natural gas and natural gas liquids pipelines. ETP also owns the
general partner, 100% of the incentive distribution rights, and approximately 67.1 million common units in Sunoco
Logistics Partners L.P. (NYSE: SXL), which operates a geographically diverse portfolio of crude oil and refined
products pipelines, terminalling and crude oil acquisition and marketing assets. ETP owns 100% of Sunoco, Inc. and
100% of Susser Holdings Corporation. Additionally, ETP owns the general partner, 100% of the incentive distribution
rights and approximately 44% of the limited partner interests in Sunoco LP (formerly Susser Petroleum Partners LP)
(NYSE: SUN), a wholesale fuel distributor and convenience store operator. ETP's general partner is owned by Energy
Transfer Equity, L.P. (NYSE: ETE). For more information, visit the Energy Transfer Partners, L.P. web site at
Energy Transfer Equity, L.P. (NYSE:ETE) is a master limited partnership which owns the general partner and
100% of the incentive distribution rights (IDRs) of Energy Transfer Partners, L.P. (NYSE: ETP), approximately 23.6
million ETP common units, approximately 81.0 million ETP Class H Units, which track 90% of the underlying
economics of the general partner interest and IDRs of Sunoco Logistics Partners L.P. (NYSE: SXL), and 100 ETP Class
I Units. On a consolidated basis, ETE's family of companies owns and operates approximately 71,000 miles of
natural gas, natural gas liquids, refined products, and crude oil pipelines. For more information, visit the Energy
Transfer Equity, L.P. website at
Forward-Looking Statements
This news release contains "forward-looking statements" which may describe Sunoco LP's ("SUN") and/or Energy
Transfer Partners, L.P.'s ("ETP") objectives, expected results of operations, targets, plans, strategies, costs,
anticipated capital expenditures, potential acquisitions, new store openings and/or new dealer locations,
management's expectations, beliefs or goals regarding proposed transactions between ETP and SUN, the expected
timing of those transactions and the future financial and/or operating impact of those transactions, including the
anticipated integration process and any related benefits, opportunities or synergies. These statements are based
on current plans, expectations and projections and involve a number of risks and uncertainties that could cause
actual results and events to vary materially, including but not limited to: execution, integration, environmental and
other risks related to acquisitions (including the SHC drop-down and future drop-downs) and the Partnerships'
overall business strategy; competitive pressures from convenience stores, gasoline stations, other non-traditional
retailers and other wholesale fuel distributors located in SUN's and SHC's markets; dangers inherent in storing and
transporting motor fuel; SUN's or SHC's ability to renew or renegotiate long-term distribution contracts with
customers; changes in the price of and demand for motor fuel; changing consumer preferences for alternative fuel
sources or improvement in fuel efficiency; competition in the wholesale motor fuel distribution industry; seasonal
trends; severe or unfavorable weather conditions; increased costs; environmental laws and regulations; dangers
inherent in the storage of motor fuel; reliance on suppliers to provide trade credit terms to adequately fund
ongoing operations; acts of war and terrorism; dependence on information technology systems; SUN's and ETP's
ability to consummate any proposed transactions, or to satisfy the conditions precedent to the consummation of
such transactions; successful development and execution of integration plans; ability to realize anticipated
synergies or cost-savings and the potential impact of the transactions on employee, supplier, customer and
competitor relationships; and other unforeseen factors. For a full discussion of these and other risks and
uncertainties, refer to the "Risk Factors" section of SUN's and ETP's most recently filed annual reports on Form 10-K.
These forward-looking statements are based on and include our estimates as of the date hereof. Subsequent
events and market developments could cause our estimates to change. While we may elect to update these
forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if new
information becomes available, except as may be required by applicable law.
Sunoco LP Energy Transfer Partners, L.P.
Scott Grischow Brent Ratliff, Vice President, Investor Relations
Director – Investor Relations and Treasury (214) 981-0700
(361) 884-2463,
Dennard-Lascar Associates Granado Communications
Anne Pearson Vicki Granado
(210) 408-6321, (214) 599-8785,
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SOURCE Energy Transfer Partners, L.P.; Sunoco LP