Business Combinations

3 Months Ended

Mar. 31, 2023

Business Combinations

Business Combinations

Note 2.    Business Combination

Acquisition of Tidewater Convenience, Inc.—On September 20, 2022, the Partnership acquired substantially all of the assets of Tidewater Convenience, Inc. (“Tidewater”) in a cash transaction. The acquisition includes 14 company-operated Tidewater convenience stores and 1 fuel site, all located in Virginia. The purchase price was approximately $40.3 million, including inventory. The acquisition was funded with borrowings under the Partnership’s revolving credit facility.

The preliminary fair values of the assets acquired and liabilities assumed as of September 20, 2022, the acquisition date, are set forth in the table below. The excess of the purchase price over the aggregate acquisition date value of identifiable net assets acquired was recorded as goodwill and assigned to the Gasoline Distribution and Station Operations (“GDSO”) segment. Substantially all of the goodwill is expected to be deductible for tax purposes. These preliminary acquisition date values were generally determined through established and generally accepted valuation techniques and are subject to change during the measurement period as valuations are finalized. As a result, the acquisition accounting is not complete, and additional information that existed at the acquisition date may become known to the Partnership during the remainder of the measurement period. The Partnership is still in the process of valuing the assets acquired of Tidewater, including inventory, property and equipment and right of use assets, and liabilities.

The following table presents the preliminary allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition (in thousands):

Assets purchased:
Inventory	$	1,004
Property and equipment		28,653
Right of use assets		638
Total identifiable assets purchased		30,295
Liabilities assumed:
Accrued expenses and other current liabilities		(908)
Environmental liabilities		(2,154)
Lease liability		(508)
Other non-current liabilities		(3,056)
Total liabilities assumed		(6,626)
Net identifiable assets acquired		23,669
Goodwill		16,651
Net assets acquired	$	40,320

The fair values of the remaining assets and liabilities noted above approximate their carrying values at September 20, 2022, the acquisition date.

There have been no changes to the preliminary allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed during the three months ended March 31, 2023.

Supplemental Pro Forma Information—Revenues and net income not included in the Partnership’s consolidated operating results for Tidewater from January 1, 2022 through the acquisition date were immaterial.