Haslams sell final 20% stake in Pilot to Berkshire Hathaway
The Haslam family is out of Pilot Travel Centers.
The legal battle between the Haslams and Berkshire Hathaway (NYSE: BRK.B) over the travel centers’ valuation was settled last week, the truce announced the day the case was to go to trial in Delaware Chancery Court. With that compleeted, the founding family exercised its “put option,” which required Berkshire to buy the 20% of PTC it did not already own.
The two companies announced the transaction late Tuesday.
“Pilot started with one gas station 65 years ago, and because of the dedicated and exceptional
team members we have had throughout our history, it is now an industry leader,” Jim
Haslam II, PTC founder, said in a prepared statement announcing the 20% sale. “While this has certainly been an emotional decision for us, it is one we felt was right for our family at this time. We look forward to continuing to support our life-long home of Knoxville, Tennessee, and to furthering our deep commitment and philanthropy throughout the region that we all love.”
The put option, also referred to as a “put right,” could first be exercised this year. It needed to be exercised within 60 days of the close of the PTS fiscal year — Dec. 31 — or it would roll over to 2025.
Berkshire first took a 38.6% stake in Pilot in 2017. At the time of the sale, a pathway to Berkshire buying the rest of Pilot was laid out. The first stake sold for $2.76 billion; the second sale for an additional 41.4% stake was completed a year ago for $8.2 billion, giving Berkshire Hathaway control.
The price for exercising the final 20% was not revealed.
The 2017 price of $2.76 billion for 38.6% of the company would have put an enterprise value on Pilot of approximately $7.1 billion. The $8.2 billion sale a year ago for 41.4% would have set the enterprise value at approximately $19.8 billion.
To show the sheer difference in the size and valuation of PTC over its theoretically larger rivals, the cost to acquire Travel Centers of America by BP was announced in February at approximately $1.3 billion. The second-largest chain, Love’s, is private and no information about its enterprise value is known.
In their announcement of the deal, the Haslams said Pilot had more than 750 locations across 44 states and six Canadian provinces. It sells about 14 billion gallons of fuel a year and $3 billion in food and merchandise. It also was described as the fifth-largest private company in America before the Berkshire Hathaway acquisition.
Source: freightwaves.com
