BP Products North America, a wholly-owned indirect subsidiary of BP, recently acquired a leading full-service travel center operator, TravelCenters of America, for $1.3 billion. This move brings a network of approximately 280 travel centers into BP’s fold. It almost doubles its global convenience gross margin and further fuels BP’s transition growth engines.
Transaction Details
The acquisition immediately boosts BP’s earnings before interest, taxes, depreciation, and amortization (EBITDA). The growth is expected to reach around $800 million by 2025. Investment, integration value, and synergies are predicted to underpin this growth. As a result of the transaction, TravelCenters of America’s common shares have been converted into the right to receive $86 per share.
Enabling Seamless Nationwide Service
Firstly, BP announced its intention to acquire TravelCenters of America in February, subject to required approvals. Secondly, now that the transaction is complete, the strategically located network of highway sites owned by TravelCenters of America complements BP’s predominantly off-highway convenience and mobility business in the US. This integration enables both companies to offer fleets and consumers a seamless nationwide service.
Future Growth Opportunities
Emma Delaney, executive vice president of customers & products at BP, expressed excitement about the acquisition. She shared that integrating BP pulse, their fast-growing EV charging business, biofuels, and renewable natural gas businesses – and, in time, hydrogen – can help America’s vital fleets and logistics companies decarbonize.
The transaction opens up opportunities for growth in four of BP’s five transition growth engines: EV charging, biofuels, hydrogen, and convenience. Moreover, by 2030, BP aims for around half its annual investment to go into these transition growth engines. It will do it with around half its anticipated cumulative $55-65 billion transition growth engine investment going into convenience, bioenergy, and EV charging.
In conclusion, BP solidifies its footing in the US with this strategic acquisition. Specifically, the convenience and mobility business marks a significant milestone in its growth.
Link of interest: Energy Outlook 2023 by bp
