FRANKLIN, Tenn. -- Mapco Express Inc. has hired investment banking firm Morgan Keegan & Co. Inc., which specializes in the convenience store and retail petroleum industry, to assist it with its acquisition strategy. Mapco Express currently operates a network of 236 stores primarily in Tennessee and Virginia. The company anticipates expanding its existing network through acquisitions over the next several years, initially targeting the southeastern U.S.
“The convenience store industry remains highly fragmented with excellent opportunities for consolidation,” said James Alligood, president and CEO of Mapco Express, in a statement. “We have engaged Morgan Keegan in an effort to expedite our growth. Together, we will initially seek acquisitions…that meet our criteria, including sufficient market density, superior-quality assets and history of profitability.”
“I’d like to have at least 50 stores or greater--preferably 75. That’s a size sufficient to staff it with marketing and training people, and a division manager,” Alligood told CSP Daily News. Superior-quality assets include “full-size convenience stores, gasoline pumping capacity of four MPDs [multiproduct dispensers] or greater, size of the lot, the pieces of real estate--all of the things that figure into what makes a good store.”
He added, “I don’t want to make an acquisition of one store for $1 million and have to spend $500,000 to get it up to par.”
Alligood indicates that it may eventually acquire a couple hundred more stores.
Mapco Express is looking at the Southeast first, which is more or less contiguous to its home market of Nashville. “You’ve got to pick somewhere, to make sure you’re not shotgunning it,” said Alligood. “And it’s easier to pick the Southeast because it is built with one distribution system, primarily, which is Colonial Pipeline, and to some degree, Plantation Pipeline.”
Other geographic areas are still a possibility, however. “The states next to us are Kentucky, Indiana and Illinois. If a good acquisition was available in one of those states, I’m not saying that we wouldn’t look at it, but we’re not looking for it.”
Mapco Express is a subsidiary of Israel-based Delek-The Fuel Corp. Ltd. Morgan Keegan & Co. is based in Memphis, Tenn.
