Editor’s note: This story was updated at 4 p.m. ET on Feb. 16 to include additional information.
TravelCenters of America, which operates truck stops across the country under the TA brand, is getting bought by BP America.
The price of the acquisition is approximately $1.3 billion, or $86 per share. TA stock (NASDAQ: TA) closed Wednesday at $49.44 per share.
“Today’s announcement that BP is acquiring TA for $86 per share is a result of the successful implementation of our turnaround and strategic plans,” TA’s CEO Jonathan Pertchik said in a prepared statement announcing the sale. “We have improved our core travel center business, expanded our network, launched TA to prepare for the future of alternative fuels and improved our operating and financial results, none of which we could have accomplished without the hard work and dedication of our employees at every level.”
Even before the pandemic, which pushed TA’s stock price to less than $10 per share in its early days, TA had struggled, with a stock price just above $10 per share in late 2019.
The sale will mean that all three major U.S. truck stop companies — TA, Love’s and Pilot Flying J — will be privately owned, though Pilot Flying J has a 38.6% share held by Berkshire Hathaway (NYSE: BRK.A).
BP has established a long-term strategy that sees oil and gas exploration as declining as a percentage of the company’s operations and investment dollars. A purchase of a truck stop that is one of the biggest diesel marketers in the country might seem at odds with that strategy.
But BP also has laid out five pillars of its future growth, and a TA acquisition fits in with several of them.
The five goals going forward, according to BP, are bioenergy, electric vehicle charging, convenience, renewables and power, and hydrogen capture and storage.
In the prepared statement released by BP America regarding the acquisition, the company said buying TA “supports delivery” of meeting the convenience and EV charging goals and having a target of more than $1.5 billion in earnings before interest, taxes, depreciation and amortization in 2025. While hydrogen was not specified, the possibility of refueling hydrogen vehicles when and if they are commercially available at some point also could help meet a third goal of the five.
On a smaller scale, BP already has begun to provide for a truck-specific “corridor” in Europe with stations to recharge vehicles. The plan was announced last month for a stretch of highway in Germany.
“TA’s strategically-located network of highway sites complements BP’s existing predominantly off-highway convenience and mobility business, enabling TA and BP to offer fleets a seamless nationwide service,” the BP announcement stated.
Having TA in the BP fold will “provide options to expand and develop new mobility offers including electric vehicle charging, biofuels, renewable natural gas (RNG) and later hydrogen, both for passenger vehicles and fleets.”
Gary Bevers, a longtime fuels market consultant who heads Bevers & Co., said BP’s fuel operations had been declining in volume for several years. It hindered the company’s ability to set up operations at fuel terminals around the country owned by third parties, “because nobody wants to be in a terminal unless they can be a player. They don’t want to have 1% of the market at a terminal.”
Having TA’s more than 200 outlets as end users needing supply out of a wide range of terminals wil increase the volume it needs and can help it reestablish profitable positions at those facilities, Bevers said.
BP did not respond to FreightWaves’ questions by publication time.
BP’s statement said it had 6,000 retail outlets flying the BP brand. Trends in the retail fuels market for many years have seen major oil companies sell any company-owned outlets in favor of a branded arrangement where a retail outlet “flies” a brand such as BP or Exxon. The retail outlet is required to buy what is known as branded fuel from wholesale terminals, known in the industry as the “rack.”
It was not clear whether the TA brand will remain or be rebranded as BP.
TA has been pursuing growth through franchising in recent years, part of Pertchik’s turnaround plan. In a statement released last month, TA said in 2022 it had signed 30 new franchise agreements for TA, Petro Stopping Centers and TA Express travel centers, reaching its goal for the year. Actual openings of new franchised sites totaled three last year and are expected to be 20 this year.
The sale of TA has been looming for a considerable period of time, according to the TA statement. Its statement said the sale is the “culmination of a comprehensive process by TA’s board.” That process featured “competitive rounds of bidding from potential buyers.”
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