TravelCenters of America (TA) stock rose as much as 70% on Thursday after the company announced BP’s (BP) North America subsidiary would buy the fuel and service center operator in a $1.3 billion, all-cash deal.
BP said in a release acquiring TA’s “strategically-located network of highway sites” complements its off-highway locations, as the oil giant scales up its convenience and mobility business.
TA operates around 280 locations across 44 states, including more than 600 full-service and quick service restaurants. BP operates around 8,000 off-highway locations.
“Over time, [this deal] will allow us to advance four of our five strategic transition growth engines,” BP CEO Bernard Looney said in a statement. “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.”
The deal values TravelCenters at $1.3 billion, or $86 per share, an 84% premium to the company’s average stock price over the last month.
“Today’s announcement is the culmination of a comprehensive process by TA’s Board,” TravelCenters company said in a release.
“Following the implementation of TA’s turnaround plan and several quarters of improved operating performance, TA received unsolicited interest to acquire the Company. In response, TA’s Board hired financial and legal advisors as part of a formal process to consider a potential sale of the Company. This process ultimately included competitive rounds of bidding from potential buyers that resulted in the transaction announced today.”
TravelCenters was called out by the White House in Wednesday’s announcement on new standards for a national EV charging network, with TA and Electrify America teaming up to install around 1,000 EV chargers at 200 of TA’s locations.
BP has been ramping up its EV charging investment, seeing it as a growth opportunity for the brand as it diversifies its offerings. BP announced earlier this week it plans to invest $1 billion into EV charging in the U.S. by 2030, including working with car rental firm Hertz to build EV infrastructure at Hertz rental locations.
BP says acquiring TA will support BP’s target of $1.5 billion in EBITDA by 2025 in its convenience and EV charging business, with a longer-term goal of $4 billion in EBITDA by 2030.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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