The biggest deal of the year didn’t even last a week.
Japanese-owned convenience chain 7-Eleven announced Sunday it had purchased the Speedway chain from Marathon Petroleum Corp. for $21 billion in cash — dwarfing Chevron’s $13.6 billion purchase last week of Noble Energy.
Dallas-headquartered 7-Eleven was advised by a Dallas-led team from Akin Gump Strauss Hauer and Feld and by the Nishimura & Asahi firm in Tokyo.
Corporate partners Tom Yang and Nicholas Houpt led the team advising 7-Eleven, along with counsel Ashton Butcher and associates Kathryn Betts, Penelope Shumway and Trevor Vega, all of the corporate practice.
In addition, a team of Akin Gump lawyers from across the firm advised on the deal, including Houston tax partners Alison Chen and Jocelyn Tau; New York partner Rolf Zaiss, counsel Stephanie Bollheimer and associate Aaron Farovitch, executive compensation and employee benefits; and partner Lauren Leyden, counsel Dustin Stark and associate Grace O’Donnell, labor and employment, all of whom office in New York.
Affiliates of Credit Suisse and Sumitomo Mitsui Banking Corporation provided committed financing for the acquisition. Alston & Bird were the legal advisors to Credit Suisse. SMBC and SMBC Nikko provided financial advisory services to Seven & i Holdings Co., Ltd.
“This acquisition is the largest in our company’s history and will allow us to continue to grow and diversify our presence in the U.S., particularly in the Midwest and East Coast,” said Joe DePinto, President and CEO of 7-Eleven. “By adding these quality locations to our portfolio, 7-Eleven will have the opportunity to bring convenience to more customers than ever before.”
Handling the in-house aspects of the deal was company’s GC Rankin Gasaway, a graduate of Texas Tech Law School and a 25-year veteran at the company. He was assisted by company senior counsel Dawud Crooms, a Michigan Law graduate and former M&A specialist in Dallas at Haynes and Boone.
Owned since 2005 by Seven & i Holdings, 7-Eleven currently has over 9,800 stores in the United States and Canada. The addition of Speedway’s 3,900 stores will bring 7-Eleven’s total number of stores to approximately 14,000 across the two countries.
Following the transaction, 7-Eleven will have stores in 47 of the top 50 most populated metro areas in the U.S.
On a pro forma basis, the transaction reflects an EBITDA multiple of 7.1x after taking into account expected impacts from the transaction, including $475 million to $575 million of run-rate synergies, $3 billion of tax benefits and $5 billion of net sale leaseback proceeds.
The transaction is expected to produce compound annual growth in 7–Eleven’s operating income and EBITDA of over 15% through the first three years following the close of the acquisition. 7-Eleven says it expects to reduce its debt-to-EBITDA ratio to less than 3.0x within two years following the close of the acquisition.