BP to acquire TravelCenters of America in $1.3B deal

WESTLAKE, Ohio — BP Products North America Inc. has agreed to purchase TravelCenters of America Inc., expanding the British-based petroleum giant into travel convenience and electrification.

The purchase price is roughly $1.3 billion, or $86 per TravelCenter share. BP and TA are targeting mid-year 2023 for the transaction to close, subject to shareholder and regulatory approval.

Westlake-based TravelCenters operates about about 281 highway sites across 44 states, mostly under the TA, Petro Stopping Centers and TA Express brands. TA offers diesel and gasoline fuel, truck maintenance and repair, full-service and quick-service restaurants, travel stores, car and truck parking and other services for consumers. It has more than 18,000 employees.

On Feb. 15, BP announced plans to invest $1 billion in electric vehicle charging across the U.S. by 2030.

BP said the acquisition will provide options to expand and develop new mobility options, including EV charging, biofuels, renewable natural gas and later hydrogen, both for passenger vehicles and fleets.

In addition, convenience is one of five strategic growth engines for BP. By 2030, the company said it expects half of its annual investment to go to these growth engines, including $55-$60 billion in convenience, bioenergy and EV charging.

BP CEO Bernard Looney said the acquisition demonstrates what the company has said it would do: lean into its transition growth engines.

" This deal will grow our convenience and mobility footprint across the US and grow earnings with attractive returns," Looney said in a statement. " Over time, it will allow us to advance four of our five strategic transition growth engines. By enabling growth in EV charging, biofuels and RNG and later hydrogen, we can help our customers decarbonize their fleets. It's a compelling combination."

BP said that around 70% of TA's total gross margin is generated by its convenience services business, nearly BP's global convenience gross margin.

BP has targeted convenience and EV charging growth to more than $1.5 billon EBITDA in 2025 and is aiming for more than $4 billion in 2030.

TA CEO Jonathan M. Pertchik said in a statement that the news "is a result of the successful implementation of our turnaround and strategic plans. We have improved our core travel center business, expanded our network, launched eTA 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."

TA said the deal culminates a turnaround plan set forth by the TA's Board, which has resulted in several quarters of improved operating performance, as well as unsolicited interest in the acquisition of the company. TA eventually secured financial and legal advisors as part of a process to consider the sale of the company, leading to several rounds of bidding from potential buyers.

Citigroup acted as exclusive financial advisor to TA and Ropes & Gray as TA's legal advisor in connection with the transaction.

The sale is contingent on the approval by shareholders who own a majority of TA's shares, including Service Properties Trust, which owns 7.8% of outstanding shares, and the RMR Group, which owns 4.1% of outstanding shares. TA said both have agreed to vote in favor of the sale.

Once finalized, TA will end its management agreement with RMR and pay a termination fee to RMR of approximately $44 million. Subject to shareholder and regulatory approval, the parties are targeting closing the acquisition by mid-year 2023.