Crossamerica Partners LP (CAPL)

History and Background

CrossAmerica Partners LP (CAPL) was founded as Lehigh Gas Partners in 2012, evolving from Lehigh Gas Corporation. It operates as a wholesale distributor of motor fuels and owner/lessee of real estate used in the retail distribution of motor fuels. It has grown through acquisitions of retail and wholesale fuel businesses.

Core Business Areas

• Wholesale Fuel Distribution: CAPL distributes motor fuels to independently operated convenience stores and gas stations under various brands, including Exxon, Mobil, Shell, Chevron, Sunoco, and Valero, as well as its own proprietary brands.
• Retail Fuel and Convenience Store Operations: CAPL owns or leases real estate used in the retail distribution of motor fuels and operates convenience stores at some of these locations, selling fuel, groceries, and other merchandise.

Leadership and Structure

Gerardo Valencia serves as the Chief Executive Officer. The company operates as a master limited partnership (MLP), structured to distribute available cash to its unitholders.

Key Offerings

• Branded Motor Fuels: CAPL distributes motor fuels under major brands like Exxon, Mobil, Shell, Chevron, Sunoco, and Valero. Market share varies by region and brand. Competitors: Sunoco LP (SUN), Global Partners LP (GLP), Marathon Petroleum (MPC).
• Unbranded Motor Fuels: CAPL also distributes unbranded motor fuels, offering retailers a flexible alternative. Market share is fragmented. Competitors: Various regional fuel distributors.
• Convenience Store Merchandise: At retail locations, CAPL sells groceries, beverages, tobacco products, and other convenience items. Competitors: 7-Eleven, Circle K, Wawa.

Industry Overview

The motor fuel distribution industry is highly competitive and affected by factors like crude oil prices, consumer demand, and regulatory changes. Convenience stores are a growing segment driven by demand for quick-service items.

Positioning

CAPL positions itself as a key distributor with a diverse portfolio of brands and retail locations. Its scale and established relationships with major fuel brands provide a competitive advantage.

Total Addressable Market (TAM)

The US motor fuel market is estimated to be worth hundreds of billions of dollars annually. CAPL, due to its national presence, captures only a very small portion of this TAM. CAPL holds a small but significant share in the TAM.

Key Competitors

• SUN
• GLP
• ARCO

Competitive Landscape

CAPL faces competition from larger, more diversified fuel distributors, as well as smaller regional players. Its competitive advantage lies in its established relationships with major fuel brands and its extensive network of retail locations. The smaller market share values are due to the market being so vast.

Jet Pep, Inc.

• Year: 2018
• Acquisition Price (USD millions): 79.4
• Strategic Rationale: Increased presence in the Southeast U.S. fuel distribution market.

Historical Growth: CAPL's historical growth has been driven by acquisitions and organic growth in its existing markets.

Future Projections: Future growth projections depend on factors such as crude oil prices, consumer demand, and the company's ability to execute its growth strategy. Analyst estimates can provide insights into future revenue and earnings.

Recent Initiatives: Recent strategic initiatives might include acquisitions, expansion into new markets, and investments in technology and infrastructure.

CrossAmerica Partners LP operates in a competitive and cyclical industry. The company's strengths include established relationships with major fuel brands and a diversified portfolio. High debt and reliance on volatile commodity prices pose challenges. CAPL needs to adapt to the changing energy landscape, including the rise of electric vehicles, to ensure long-term growth and shareholder value.

Data Sources:

• Company SEC filings (10-K, 10-Q)
• Company Investor Relations materials
• Industry reports and publications
• Analyst reports

Disclaimers:

This analysis is based on publicly available information and is not financial advice. Investment decisions should be made after consulting with a qualified financial advisor. Market share data is estimated and may not be precise.