TA Buys Truck Stop Chain
TravelCenters of America, based in Westlake, Ohio, announced a plan to buy all the stock in Travel Ports of America for about $40.5 million.
Travel Ports operates 16 truck stops and travel plazas in seven states, mostly in the Northeast. The publicly owned company was started in 1979 as a franchisee of Truckstops of America, which later was renamed TravelCenters of America.
The chairman of Travel Ports, E. Philip Saunders, founded TA in 1965 and was instrumental in reshaping the truck stop industry from overgrown gas stations to modern travel plazas with stores, restaurants and lodging facilities.
Late last year, TA acquired Burns Bros. Travel Stops, which included 17 facilities in the western and northwestern United States.
A spokesman at TA said the company continues to evaluate locations for additional full-service truck stops and is putting new facilities in Denver, Atlanta and San Antonio. The company has also developed a prototype facility, featuring a fast-food court of restaurants instead of a full-service restaurant, fewer parking spaces and a smaller maintenance shop.
The first prototype was scheduled for construction in Rockwall, Texas, but it has been held up by local zoning restrictions, the spokesman said.
The Travel Ports buyout is expected to be completed during the second quarter of this year, the companies said.
Under terms of the transaction announced Feb. 26, TA will pay $4.30 a share for all outstanding shares of Travel Ports stock. Travel Ports stock closed Feb. 25 at $3.25 a share and traded between $4.25 and $2.44 over the past 52 weeks.
Saunders will exchange about 653,000 shares of Travel Ports stock he owns for TA shares equivalent to between 2% and 3% of the outstanding TA voting stock. He will also be nominated to TA’s board of directors.
John M. Holahan, president of Travel Ports, said he will have a “continuing relationship” with TA as a consultant.
The buyout “is a reflection of what’s going on in the travel industry,” Holahan said. “Our feeling was that for the long range we would have to grow more rapidly or merge. We think they’re going a very good job. Our facilities match up very well.”
Travel Ports earned $2.3 million, or 30 cents for each diluted share, on revenue of $211.5 million in the fiscal year that ended April 30, 1998. In the six months that ended Oct. 31, the company earned $1.2 million (15 cents) on revenue of $105.2 million.
Ed Kuhn, president of TA, characterized the two companies as “a natural fit.”
“Our operating philosophies and commitment to quality products and services parallel one another,” he said. “More importantly, our combined customer base will benefit by the addition of more fueling locations, consolidated billing and consistent customer programs and policies.”
