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.”
More articles by John Kingston
Golfer Sam Ryder the face of Ryder System ads after famous hole in one
Ryder tells investors it rejected acquisition by HG Vora
U.S. Xpress execs optimistic in face of another red-ink quarter
Pedie
I dont know where you get higher rates, these are the worst in years. More foreigners on the road now. There is a major change coming and american owner operators are out. Done. No way we can afford electric trucks, self driving trucks or any alternative thereof. So get prepared. It has started.
Zee
Showers, parking and food are our biggest concerns. Mega carriers may benefit from this but I don’t see owner operators purchasing semis that have to be shutdown and charged after 500 miles. The biggest threat to truckers are non truckers making decisions for our industry.
Michael
Please get rid of the reserved parking and us truck drivers perfer sit down restaurants n bring back the buffets golden corral would do good in a ta
Robert Ellis
They buy just the T/A ? Or the Petro too?
Earl E Davis jr
The Redcoats are Coming The Redcoats are Coming and they just bought out another American Intity..America don’t even own America. And every passing year America just don’t seem like America no doggone more.👎
Steven
I would hope they remodel the showers and reinstate their employee and Tennant random drug testing policies.
The ta and Petros are turning into drug and other organized criminal activities.
These two chains were the pinnacle of style and quality before their focus deviated.
It’s about the economy…..I hope they can bring it back I miss being able going into a travel center and just being able to relax without having to qualify a location on its employees ability to function….
Bill
Well Odell, let’s look at this from a wider perspective.
If it weren’t for oil companies, refineries, pipelines, fuel tankers and truck stops – what you call ‘greedy corporations’ – there would not be ANY trucks on the road.
Also, in my 49 years of driving I’ve never seen this many trucks on the interstates or higher rates.
Of course the costs are higher too – it’s all relative.
Odell Crespo
They’re are hardly no trucks on the road, because of the cheap rates, and fuel prices but wait, lets buy the truck stops too. These greedy corporations, are destroying this nation.