Jasper Oil Company

The Project:

• The Company retained Corner Capital to perform analyses and provide recommendations related to lease structures and economics behind the Company’s owned and operated c-store assets.
• Specifically, the Company was interested in divesting its retail operations (while retaining all its real estate), potentially to a family member as part of the owner’s retirement strategy.

The Solution:

• Corner Capital created and structured two potential sale structure valuations that were presented to the Company:
• Scenario 1 – Traditional Sale: Under this sale structure, the retail assets of the Company would be divested to a multi-chain operator. The buyer would purchase the Company’s c-store real estate, improvements, and equipment as part of the transaction, retaining minimal personnel above store level operations. Furthermore, this scenario assumes that the buyer is already a branded distributor through its own fuel distribution agreement and would require the Company’s fuel distribution agreements—branded and unbranded—to transfer to the buyer upon a sale.
• Scenario 2 – Lease Structure: Under this sale structure, single-store operators would enter into a lease agreement with the Company. It assumed the buyer does not have its own branded distributor agreement and would be supplied by the Company under a “rack plus” or “commission/consignment” supply model. The leases would be long term with a Net Lease structure, with the Tenant responsible for all taxes, maintenance, and repairs. Furthermore, the Company would enter into long term fuel supply contracts with each location and Tenant.

The Result:

• Upon review of the two scenarios presented by Corner Capital, the Company determined that Scenario 2 was the best fit for its strategic objectives and moved forward with the lease structure divestiture of its retail operations.