Murphy USA Inc 8-K, filed Dec 14, 2020
Murphy USA Inc. (MUSA)
8-K
2020-12-14
For: 2020-12-12
View Original
Added on
April 10, 2026
About this 8-K
Murphy USA Inc filed this 8-K on December 14, 2020, reporting on events of December 12, 2020.
Items reported
- Item 1.01: Entered into a material agreement
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): December 12, 2020
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
(870 ) 875-7600
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
On December 12, 2020, Murphy USA Inc., a Delaware corporation (the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Quick Chek Corporation, a New Jersey corporation (“QuickChek”), Murphy USA NJ, Inc., a New Jersey corporation and a wholly owned subsidiary of the Company (“Merger Sub”), and Fortis Advisors LLC, a Delaware limited liability company, solely in its capacity as the Shareholder Representative (as defined in the Merger Agreement). Pursuant to the terms and conditions of the Merger Agreement, on the closing date (the “Closing Date”), Merger Sub will merge with and into QuickChek, with QuickChek surviving such merger as a wholly owned subsidiary of the Company (the “QuickChek Acquisition”).
The aggregate purchase price payable by the Company on the Closing Date is $645 million in cash, subject to customary adjustments for cash, debt, net working capital and transaction expenses. The closing of the QuickChek Acquisition is subject to customary closing conditions, including the expiration or termination of the applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended. The shareholders of QuickChek have approved the transaction and no further shareholder approvals are required. The Company expects to finance the acquisition with a combination of cash-on-hand, existing credit facilities and the proceeds of new debt financing, and in connection with the acquisition has obtained committed financing from the Royal Bank of Canada.
The Merger Agreement contains customary representations, warranties and covenants of the Company, Merger Sub and QuickChek. From the date of the Merger Agreement until the Closing Date, QuickChek is, with limited exceptions, required to conduct its business in the ordinary course consistent with past practice and to comply with certain covenants regarding the operation of its business.
The Merger Agreement provides for certain termination rights of the Company and QuickChek, including termination by the Company or QuickChek if the closing has not been consummated on or before March 12, 2021, but only if the party terminating the Merger Agreement (and in the case of the Company, Merger Sub) has not breached its obligations under the Merger Agreement, which breach materially contributed to the failure of the consummation of the transactions contemplated by the Merger Agreement.
The above description of the Merger Agreement does not purport to be complete and is included solely as a summary of the material terms of the Merger Agreement, a copy of which will be filed as an exhibit to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2020. The Merger Agreement contains representations and warranties made by the Company, Merger Sub and QuickChek to, and solely for the benefit of, each other. The assertions embodied in the representations and warranties of QuickChek contained in the Merger Agreement are qualified by information in disclosure schedules provided by QuickChek to the Company and Merger Sub in connection with the signing of the Merger Agreement. While the Company does not believe that these disclosure schedules contain information that the securities laws will require the Company to publicly disclose, other than information that has already been so disclosed, they do contain information that modifies, qualifies and creates exceptions to the representations and warranties of QuickChek set forth in the Merger Agreement. Investors should not rely on the representations and warranties in the Merger Agreement as characterizations of the actual state of facts about the parties, because they were only made as of the date of the Merger Agreement and the representations and warranties of QuickChek are modified in important part by the underlying disclosure schedules. Moreover, certain representations and warranties in the Merger Agreement were used for the purpose of allocating risk between the Company, Merger Sub and QuickChek rather than establishing matters as fact. Finally, information concerning the subject matter of the representations and warranties may have changed since the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.
Item 7.01. Regulation FD Disclosure
On December 14, 2020, the Company and QuickChek issued a joint press release announcing their entry into the Merger Agreement, which is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
On December 14, 2020, the Company issued an investor presentation entitled "Supplemental Presentation: Agreement to Acquire QuickChek," which is attached as Exhibit 99.2 to this Current Report on Form 8-K and incorporated herein by reference.
Pursuant to General Instruction B.2. to Form 8-K, the information set forth in this Item 7.01, including Exhibit 99.1 and Exhibit 99.2, shall not be deemed “filed” purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this current report on Form 8-K contain or may suggest “forward-looking” information (as defined in the Private Securities Litigation Reform Act of 1995) that involve risk and uncertainties, including, but not limited to our M&A activity, anticipated store openings, fuel margins, merchandise margins, sales of RINs, trends in the Company’s operations, dividends and share repurchases. Such statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual future results may differ materially from historical results or current expectations depending upon factors including, but not limited to: the Company’s ability to consummate the acquisition of QuickChek on the stated terms or at all; the Company’s ability to realize projected synergies from the acquisition of QuickChek and successfully expand our food and beverage offerings; the Company’s ability to finance the acquisition of QuickChek on acceptable terms; the Company’s ability to continue to maintain a good business relationship with Walmart; successful execution of the Company’s growth strategy, including the Company’s ability to realize the anticipated benefits from such growth initiatives, and the timely completion of construction associated with the Company’s newly planned stores which may be impacted by the financial health of third parties; the Company’s ability to effectively manage the Company’s inventory, disruptions in the Company’s supply chain and the Company’s ability to control costs; the impact of severe weather events, such as hurricanes, floods and earthquakes; the impact of a global health pandemic, such as COVID-19 including the impact on the Company’s fuel volumes if the gradual recoveries experienced in Q2 2020 stall or reverse as a result of any resurgence in COVID-19 infection rates and government reaction in response thereof; the impact of any systems failures, cybersecurity and/or security breaches, including any security breach that results in theft, transfer or unauthorized disclosure of customer, employee or company information or the Company’s compliance with information security and privacy laws and regulations in the event of such an incident; successful execution of the Company’s information technology strategy; future tobacco or e-cigarette legislation and any other efforts that make purchasing tobacco products more costly or difficult could hurt the Company’s revenues and impact gross margins; changes to the Company's capital allocation, including the timing, declaration, amount and payment of any future dividends or levels of the Company's share repurchases, or management of operating cash; the market price of the Company's stock prevailing from time to time, the nature of other investment opportunities presented to the Company from time to time, the Company's cash flows from operations, and general economic conditions; compliance with debt covenants; availability and cost of credit; and changes in interest rates. The Company’s SEC reports, including the Company’s most recent annual report on Form 10-K and quarterly report on Form 10-Q, contain other information on these and other factors that could affect the Company’s financial results and cause actual results to differ materially from any forward-looking information the Company may provide. The Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information or future circumstances.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
| Exhibit Number | Description | ||||
| 104 | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive data File because its XBRL tags are embedded within the Inline XBRL document | ||||
*Furnished herewith
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MURPHY USA INC. | ||||||||
| Date: December 14, 2020 | By: /s/ Donald R. Smith, Jr. | |||||||
| Donald R. Smith, Jr. | ||||||||
| Vice President and Controller | ||||||||
Exhibit 99.1
Murphy USA Announces Agreement to Acquire QuickChek—One of the Leading Food and Beverage C-Store Operators in the U.S.
Consistent with October’s stated capital allocation update, this acquisition: delivers on Murphy USA’s strategic priority of developing enhanced food and beverage capabilities to enhance our existing attractive organic growth plans; fulfills our high aspirations by securing a true industry leader with its own attractive growth pipeline and the capabilities to leverage across our portfolio as we launch our next chapter of growth; and upholds our commitment to shareholders, as meaningful expected synergies support an accretive transaction of a reasonable size that enables us to maintain future flexibility and shareholder distributions.
EL DORADO, Arkansas and WHITEHOUSE STATION, New Jersey, December 14, 2020 – Murphy USA announced an agreement to acquire QuickChek Corporation (“QuickChek”) in an all-cash transaction for $645 million. The purchase price includes expected tax benefits valued at $20 million for a net after-tax purchase price of $625 million. The transaction will be financed with a combination of cash on hand, existing credit facilities and new debt, and Murphy USA has obtained committed financing from the Royal Bank of Canada.
QuickChek represents a truly distinctive business in a class shared by only a few comparable industry peers. Founded in 1967 as an extension of Durling Farms, a door-to-door milk and fresh dairy products delivery service that originally opened in 1888, it is a family-owned chain of 157 stores located in central and northern New Jersey and the New York metro area. It operates a best-in-class food and beverage (“F&B”) model with a strong regional brand and engaged customer following, offering quick-serve restaurant style food alongside convenience items; a high-volume fuel offer is included at 89 of its newest stores. Its industry leading economics are evidenced by robust per-store per-year merchandise sales of $3.5 million, combined merchandise margins of 38% with F&B representing over 50% of the mix, and per-store per-year fuel gallons of 3.8 million. Additionally, QuickChek has a proven history of same-store-sales growth and a rich real estate pipeline to sustain unit growth within its existing footprint.
The acquisition is consistent with Murphy USA’s updated capital allocation strategy as announced in October. It represents a continued commitment to deliver exceptional and sustained value to long-term shareholders and will complement other ongoing value creation mechanisms, including ongoing productivity improvement initiatives, organic growth, share repurchase and a dividend.
“In October we outlined an updated capital allocation strategy and committed to improving our food and beverage offer at existing and future sites,” said Murphy USA President and CEO Andrew Clyde. “This transaction greatly accelerates those efforts and benefits, and is expected to provide reverse synergies across our network, while enhancing future returns on new stores. The transaction is also expected to create direct synergies that leverage our enterprise scale and our distinctive capabilities in fuel, tobacco and loyalty. We are excited to join forces with an exceptional and highly
engaged team at QuickChek who share Murphy USA’s passion for delivering excellence every day to all our stakeholders.”
“QuickChek and Murphy USA both reflect a family heritage and a strong people culture,” said QuickChek CEO and Chairman Dean Durling. “I am thrilled by Murphy USA’s commitment to honor our legacy and preserve our brand while learning from our business model. I am proud of what we have accomplished in making QuickChek what it is today and I am excited about the opportunities for continued growth and success in the next chapter in QuickChek’s journey. I know QuickChek’s dedicated employees and valued customers remain in good hands.”
The above considerations result in highly attractive deal economics. The net investment of $625 million represents a multiple of 13.2 times QuickChek’s estimated LTM October 2020 Adjusted EBITDA of $47 million. Annual run rate synergies of $28 million are expected to be achieved by the third year. When taking into account expected run-rate synergies and tax benefits, the acquisition reflects a multiple of 8.3 times estimated LTM Adjusted EBITDA. The acquisition is projected to be accretive to earnings in 2022, the first full year of combined operations.
The transaction is expected to close during the first quarter of 2021, subject to customary closing conditions and regulatory approval. RBC Capital Markets, LLC acted as exclusive financial advisor and Davis Polk & Wardwell LLP acted as legal advisor to Murphy USA. BofA Securities, Inc. acted as exclusive financial advisor and Weil, Gotshal & Manges LLP acted as legal advisor to QuickChek.
Webcast Information
Murphy USA will host a conference call to discuss the transaction at 8:00 a.m. CT on Monday, December 14, 2020. Interested parties may participate by dialing 1-833-968-2218 and referencing conference ID number 8192285. The call can also be accessed via webcast through the Investor Relations section of Murphy USA’s website at http://ir.corporate.murphyusa.com. The webcast will be available for replay one hour after the conference concludes and a transcript will be made available shortly thereafter.
About Murphy USA
Murphy USA (NYSE:MUSA) is a leading retailer of gasoline and convenience merchandise with nearly 1,500 sites located primarily in the Southwest, Southeast and Midwest United States. The company and its team of nearly 10,000 employees serve an estimated 1.7 million customers each day through its network of retail gasoline stations in 25 states. The majority of Murphy USA's sites are located in close proximity to Walmart stores. The company also markets gasoline and other products at standalone stores under the Murphy Express brand. Murphy USA ranks 262 among Fortune 500 companies.
About QuickChek
Continuing to redefine “fresh convenience,” QuickChek is a market leader in food service providing local one-stop shopping where consumers can enjoy delicious made-to-order subs and sandwiches, guaranteed fresh brewed coffee, healthy snacks and
salads, hot breakfast and more. Looking to make a difference in people’s everyday lives, QuickChek enables consumers to choose their convenience: you can place a mobile order through the QuickChek Rewards app where you’ll earn rewards for future savings; have your order ready through Curbside Pickup; utilize in-store self-checkout counters to get you on your way safe and fast; or have your order delivered through DoorDash and Grub Hub. Based in Whitehouse Station, NJ, the family-owned company operates 157 fresh convenience market stores including 89 locations with fuel throughout New Jersey, New York’s Hudson Valley and Long Island.
Certain statements in this news release contain or may suggest “forward-looking” information (as defined in the Private Securities Litigation Reform Act of 1995) that involve risk and uncertainties, including, but not limited to anticipated store openings, fuel margins, merchandise margins, sales of RINs and trends in our operations. Such statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. Actual future results may differ materially from historical results or current expectations depending upon factors including, but not limited to: our ability to consummate our acquisition of QuickChek on the stated terms or at all; our ability to realize projected synergies from the acquisition of QuickChek and successfully expand our food and beverage offerings; our ability to finance the acquisition of QuickChek on acceptable terms; our ability to continue to maintain a good business relationship with Walmart; successful execution of our growth strategy, including our ability to realize the anticipated benefits from such growth initiatives, and the timely completion of construction associated with our newly planned stores which may be impacted by the financial health of third parties; our ability to effectively manage our inventory, disruptions in our supply chain and our ability to control costs; the impact of severe weather events, such as hurricanes, floods and earthquakes; the impact of a global health pandemic, such as COVID-19 including the impact on our fuel volumes if the gradual recoveries experienced in Q2 2020 stall or reverse as a result of any resurgence in COVID-19 infection rates and government reaction in response thereof; the impact of any systems failures, cybersecurity and/or security breaches, including any security breach that results in theft, transfer or unauthorized disclosure of customer, employee or company information or our compliance with information security and privacy laws and regulations in the event of such an incident; successful execution of our information technology strategy; future tobacco or e-cigarette legislation and any other efforts that make purchasing tobacco products more costly or difficult could hurt our revenues and impact gross margins; changes to the company's capital allocation, including the timing, declaration, amount and payment of any future dividends or levels of the company's share repurchases, or management of operating cash; the market price of the Company's stock prevailing from time to time, the nature of other investment opportunities presented to the Company from time to time, the Company's cash flows from operations, and general economic conditions; compliance with debt covenants; availability and cost of credit; and changes in interest rates. Our SEC reports, including our most recent annual Report on Form 10-K and quarterly report on Form 10-Q, contain other information on these and other factors that could affect our financial results and cause actual results to differ materially from any forward-looking information we may provide. The company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information or future circumstances.
Supplemental Disclosure Regarding Non-GAAP Financial Information
The reconciliation of estimated LTM October 2020 Adjusted EBITDA to estimated GAAP net income for QuickChek is as follows:
(Millions of dollars) | LTM Oct 2020 | ||||
Estimated net income | $8 | ||||
Income tax expense | $3 | ||||
Interest expense | $5 | ||||
Depreciation and amortization | $29 | ||||
Other | $2 | ||||
Estimated Adjusted EBITDA | $47 | ||||
Consistent with Murphy USA’s historical presentation of non-GAAP metrics, Adjusted EBITDA for QuickChek is provided as it is a key metric used in the Company’s operational and financial decision-making. The Company believes that some investors may find it a useful indicator of ongoing operating performance and ability to generate cash flows from operations. Non-GAAP measures are not a substitute for GAAP disclosures and Adjusted EBITDA may be prepared differently by us than by other companies using similarly titled non-GAAP metrics. The above amounts are estimated based on preliminary data for QuickChek’s fiscal year ended October 30, 2020 and are subject to change based on the finalization of the financial statements for such fiscal year.
Source: Murphy USA Inc. (NYSE: MUSA)
Investor Contact:
Christian Pikul – Vice President of Investor Relations and FP&A
Christian.Pikul@murphyusa.com
Mitchell Freer – Investor Relations Analyst
Mitchell.Freer@murphyusa.com
Murphy USA Inc. 1 Supplemental Presentation: Agreement to Acquire QuickChek December 2020
Murphy USA Inc. 2 Safe Harbor and Non-GAAP Disclosure Christian Pikul, CFA Vice President of Investor Relations and FP&A Christian.pikul@murphyusa.com This presentation contains forward-looking statements. These statements, which express management’s current views concerning future events or results, are subject to inherent risks and uncertainties. Factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements include, but are not limited to, our ability to consummate our acquisition of QuickChek on the stated terms or at all; our ability to realize projected synergies from the acquisition of QuickChek and successfully expand our food and beverage offerings; our ability to finance the acquisition of QuickChek on acceptable terms; the volatility and level of crude oil and gasoline prices, the pace and success of our expansion plan, our relationship with Walmart, political and regulatory uncertainty, uncontrollable natural hazards, and adverse market conditions or tax consequences, among other things. For further discussion of these factors, see “Forward-Looking Statements” and “Risk Factors” in Murphy USA’s latest periodic reports on Forms 10-Q and 10-K filed with the SEC. Murphy USA undertakes no duty to publicly update or revise any forward-looking statements. The Murphy USA financial information in this presentation is derived from the audited and unaudited consolidated financial statements of Murphy USA Inc. for the years ended December 31, 2019, 2018, 2017, 2016, and 2015. Please reference our most recent 10-K, 10-Q, and 8-K filings for the latest information. This presentation contains non-GAAP financial measures. We have provided a reconciliation of such non-GAAP financial measures to the most directly comparable measures prepared in accordance with U.S. GAAP in the Appendix to this presentation.
Murphy USA Inc. 3 Strategic Rationale • Murphy USA delivers a foundational element of its strategy with the acquisition of QuickChek – In its October 2020 capital allocation strategy update, MUSA stated it would consider targeted M&A to secure an at-scale food and beverage (F&B) capability to accelerate its capability building efforts in order to further enhance its attractive organic growth plan – MUSA recognized the challenges of both building such capabilities internally and successfully acquiring a target with truly industry leading performance • QuickChek fulfills our very high aspirations and positions MUSA well for the next chapter of growth – Secure one of the industry’s leading F&B C-store operators with a distinctive brand and customer value proposition as well as its own attractive growth pipeline – Transform MUSA’s existing organic growth plans in attractive markets while appropriately upgrading our existing F&B platforms across the network • This transformational and accretive transaction upholds our commitment to shareholders – Expected to create attractive run rate synergies from leveraging the best of both firms – Maintain future flexibility and sustain shareholder distributions • We are excited to join forces with an exceptional and highly engaged team at QuickChek who shares Murphy USA’s passion for delivering excellence every day to all our stakeholders
Murphy USA Inc. 4 Overview • Murphy USA Inc. to acquire QuickChek ̶ 157 locations across New Jersey and New York ̶ LTM October 2020E EBITDA of $47M Purchase Price • $645M in all-cash transaction • $625M net value adjusting for tax benefits valued at $20M Synergies • Expect $28M in synergies achieved in three years Transaction EBITDA Multiple • Expected net value, pre-synergy: 13.2x • Expected net value, post-synergy: 8.3x Closing • Expected in Q1 2021 EPS Accretion • Expected to be accretive to FY 2022E EPS (first calendar year of operations post-close) Financing • Expected to be financed through a combination of cash on hand, existing credit facilities and new debt • Pro forma total leverage of 2.2x excluding synergies Transaction Overview Note: See appendix for Adjusted EBITDA reconciliation.
Murphy USA Inc. 5 QuickChek Overview • Founded in 1967 as an extension of Durling Farms, a door- to-door milk and fresh dairy products delivery service that originally opened in 1888 • 157 well-positioned convenience stores in central and northern NJ and the NY metro area • Widely recognized for its award-winning fresh food offerings and coffee program • All new locations have fuel stations and offer an extensive display of freshly-made QuickChek grab-and-go food market items • Owns 10% of real estate with an average store size of ~5,500 sq. ft. $542M LTM Merchandise Sales 272M LTM Fuel Gallons Sold $47M LTM Adjusted EBITDA Note: QuickChek figures LTM as of 10/30/20 (unaudited); See appendix for Adjusted EBITDA reconciliation Key StatsCompany Overview Fuel 57% Non-Fuel 43% Fuel 34% Merchandise 66% Total Stores: 157 LTM Gross Profit Fuel vs. Non-Fuel Stores Gross Profit Mix
Murphy USA Inc. 6 QuickChek Merchandise Gross Profit Mix (FY’19) EMPHASIS ON FRESH AND PERSONALIZATION Commitment to Food Service Food & Beverage Menu Offering Merchandise Programs MACS & SNACKS ICED DRINKS SALADS & WRAPS BREAKFAST FRESH TO GO SOUPS FROZEN DRINKS HOT DRINKS FRESH BAKERY FRESH FRIES FOUNTAIN BEVERAGES SUBS & SANDWICHES NACS Average • Made-to-order breakfast items • Oven-toasted fresh QuickChek subs • Personalized hot and cold beverages exactly as customers want • Freshly prepared ready-to-go items, any time of day or night • Food warmers installed in every store • Testing new and seasonal products (recently launched new subs with 33% more meat) Merchandise Gross Profit Per Store Note: Casey’s, Couche-Tard and QuickChek LTM as of 111/19; Murphy USA and Speedway LTM as of 12/31/19. NACS average reflects annualized weighted average benchmark store, per month data per 2019 NACS State of the Industry. Couche-Tard represents U.S. figures. 34% 37% 15% 13% 1% Drinks + Foodservice = of Gross Profit 52% Grocery Foodservice Drinks BW&L Tobacco $ in thousands 60% 73% 74% 57% 52% 51% 37% Merchandise % of Total Gross Profit $1,396 $1,289 $674 $481 $475 $469 $282 Fuel Stores
Murphy USA Inc. 7 Innovation Drives Engagement What’s a Good NPS Score? (Per Retently) <0: 0 – 30: 30 – 70: >70: Needs Improvement Good Great Excellent ¹ ¹ L.E.K Consulting, “Evolving the Convenience Store”; September 2019. ¹ Market / OthersQSR/Coffee Peer C-Store Peer Food & Beverage Quality and Value Overall Satisfaction 5 = Very Satisfied, 1= Not At All 4.7 4.4 4.4 4.4 4.2 4.1 3.8 3.1 M a rk e t O th e rs Q S R # 1 Q S R # 2 Q S R # 3 C -S to re # 1 C -S to re # 2 Food & Beverage Quality and Value Likely to Recommend 10 = Definitely, 1= Definitely Not 8.7 8.4 7.8 7.8 7.0 5.8 M a rk e t O th e rs Q S R # 1 Q S R # 2 Q S R # 3 C -S to re #1 C -S to re #2 Demonstrated Customer Advocacy Source: Market study conducted by third-party (StudyLogic) as of Q1’20. Reflects North and South Jersey operating area with a sample size of 22,901 panelists. 8.3 8.2 Industry Leading Food and Beverage Program First in the industry to introduce Self-checkout in 69 stores today Results in 35%+ greater throughput and effectively eliminating queuetimes SELF-CHECKOUT Implemented in 2006 Improved order accuracy and engaged customers to upsize Can customize and track ingredients TOUCHSCREENS Mobile ordering available from 5AM to 10PM Offers Power Perks (e.g., free coffee) and exclusive coupons Provides real-time fuel data at all locations MOBILE APP Recently launched in April 2020 Orders can be placed through mobile app Drives higher average ticket amount versus typical mobile orders CURBSIDE Recently launched in August 2020 Fully integrated into kitchen monitoring systems for efficiency Onboarding Uber Eats and GrubHub soon DELIVERY 58% 33% 32% 28% 26% Drug Stores / Pharmacies C-StoresGrocery / Supermarkets QSRQuickChek
Murphy USA Inc. 8 3,548 2,979 1,965 1,710 1,365 1,070 771 Complementary Fuel Performance Existing MUSA Bulk Supply Resources Potential Bulk Supply Opportunity Note: Casey’s, Couche-Tard and QuickChek LTM as of 11/1/19; Murphy USA and Speedway LTM as of 12/31/19. NACS average reflects annualized benchmark store, per month data per 2019 NACS State of the Industry. Couche-Tard represents U.S. figures. QuickChek represents fuel stores only. Industry-Leading Fuel Volumes NACS Average Fuel Gallons per Store (in thousands) Fuel Supply Potential Murphy USA’s advanced supply capability can drive performance Take advantage of Murphy Retail Pricing Excellence initiative while leveraging common pricing platforms Integrate fuel supply and distribution procurement with common suppliers at greater scale Create opportunities around NY Harbor bulk supply market with proprietary supply and trading skills along with Colonial Pipeline and Wholesale channel positions Leverage Murphy Capabilities
Murphy USA Inc. 9 Established Growth Food & Beverage Performance 29% 29% 29% 30% 30% 27% 53% 52% 52% 53% 52% 45% 2015 2016 2017 LTM2018 2019 % of Total Merchandise Sales % of Total Merchandise Gross Profit Store Growth 5 / (2) 8 / (4) 7 / (1) 8 / (3) 9 / (7) Stores Opened / (Closed) ¹ 1) 2015 values calculated using 2016-2019 actual Food & Beverage ramp Note: Compound growth measured between 2015 and 2019 and excludes any 2020 results Note: QuickChek LTM as of 10/30/20 (unaudited) 53 61 68 76 84 89 88 84 83 80 74 68 Current2016 158 2015 20182017 2019 141 145 151 156 157 +2.9% Fuel Non-Fuel Merchandise Sales $ in Millions $477 $540 $542 20162015 20192017 2018 LTM +3.1% 0.4% 185 298 272 2017 LTM2015 2016 20192018 +12.7% -8.7% Fuel Gallons In Millions Total Gross Profit $ in Millions 22% 19% 80% 20% 2015 78%81% 20182016 2017 $256 24% 76% 27% 73% 2019 33% 67% LTM $211 $221 $236 $281 $279+7.4% Fuel Merchandise
Murphy USA Inc. 10 Synergy Overview Synergy Type Direct Fuel Contribution • Retail Pricing Capabilities • S&D Contracting Scale Merchandise Margin • Tobacco Pricing Capabilities • Loyalty Program Incentives Operating Expense • Labor Modeling Practices • 3rd Party Contracting Scale Value Formula Impact Opportunity Areas Reverse $28M Expected 3-year Run Rate Other Fundamental Considerations Introduces brand extension / expansion options across portfolio De-risks and avoids costs of organic F&B capability- building investments Provides platform for accelerating enhanced organic growth Projected Synergies Merchandise Margin • NTI / R&R Platform Design • Portfolio Upgrade Corporate Costs • Enterprise Scale • Technology Integration
Murphy USA Inc. 11 Enhances Murphy USA’s Growth Profile QuickChek Note: QuickChek FYE ~10/31, Murphy USA FYE 12/31. Murphy USA 8 7 8 9 5 Up to 10 FY16 FY17 FY18 FY19 FY20 Planned Annual Additions • Established real estate team with proven ability to identify and develop profitable new stores in existing markets • Multi-year pipeline of stores under contract with further opportunities identified • Marketing and opening larger format stores • Reverse synergies lead to increased returns for existing / enhanced new store prototypes for NTIs and Raze & Rebuilds 67 45 26 17 25-27 Up to 50 FY16 FY17 FY18 FY19 FY20E Planned Annual Additions Historical and Future Store Plans QuickChek Large Format Development Capabilities
Murphy USA Inc. 12 Financial Impact Transaction Summary EBITDA Bridge ($M) + Note: QuickChek estimated LTM Adj. EBITDA as of 10/30/20 and Murphy USA LTM Adj. EBITDA as of 9/30/20; See appendix for Adjusted EBITDA reconciliation (1) Reflects purchase price net of expected tax benefits of $20M. (2) Reflects expected year 3 run-rate synergies. Tax Benefits • Expect $20M of tax benefits Synergies • Expect to deliver run-rate synergies of approximately $28M by year three EPS Impact • Expected to be accretive to FY 2022E EPS (first calendar year of operations post-close) Financing • Expected to be financed through a combination of cash on hand, existing credit facilities and new debt • Pro forma total leverage of 2.2x excluding synergies Timeline • Anticipated to close in the first quarter of 2021, subject to customary closing conditions and regulatory approvals $699 $773 $47 $28 Murphy USA Adj. EBITDA QuickChek Adj. EBITDA Year 3 Synergies Pro Forma Murphy USA Pro Forma Transaction EBITDA Multiple (1) 13.4x 8.4x (5.0x) Net Transaction EBITDA Multiple Year 3 Synergies PF Net Transaction EBITDA Multiple (2) (4.9x) 2 3
Murphy USA Inc. 13 Enhanced Value Creation EPS Growth Organic Growth Fuel Contribution Fuel Breakeven Shareholder Distributions • Accelerate build-out of QuickChek locations • Optimize MUSA format and consolidated capital expenditures Enhanced Levers Corporate Costs * + - MUSA Value Creation Drivers Strategy Build/Rebuild assets where we have a right to win • Enhance existing QuickChek profitability through MUSA scale and strengths • Increase food and beverage contribution across existing MUSA network • Align on future capability investments including technology platforms • Realize earnings accretion • Maintain balance sheet flexibility • Sustain shareholder distributions Increase productivity of existing stores through distinct capabilities Execute updated capital allocation strategy with discipline Transaction positions us for EPS growth with expected accretion
Murphy USA Inc. 14 Appendix
Murphy USA Inc. 15 Non-GAAP adjusted EBITDA reconciliation (fn) The above amounts are estimated based on preliminary data for QuickChek’s fiscal year ended October 30, 2020, and are subject to change based on the finalization of the financial statements for such fiscal year. (fn) (Millions of dollars) Murphy USA QuickChek LTM as of 9/30/20 LTM as of 10/30/20 Net Income $ 373 $ 8 Income taxes 118 3 Interest expense, net of interest income 50 5 Depreciation and amortization 158 29 EBITDA $ 698 $ 45 Net settlement proceeds $ - $ - Accretion of asset retirement obligations 2 - (Gain) loss on sale of assets (1) - Loss on early debt extinguishment - - Other nonoperating (income) expense 0 2 Adjusted EBITDA $ 699 $ 47