...May 23, 2023 The company's modest size, along with its aggressive acquisition-focused growth strategy and financial-sponsor ownership, limit our ratings. We believe FR Refuel will remain a smaller operator with modest geographic scope in the rapidly consolidating convenience store (c-store) industry. At the same time, we expect its S&P Global Ratings adjusted leverage will remain elevated in the 6x area or above over the next year or two due to its significant ownership by equity sponsor First Reserve, as well as the likelihood management will pursue potentially accretive acquisitions. We note that our projected leverage is greater than our previous estimates because of changes to FR Refuel's expected operating leases. Still, we expect management's improvement initiatives will support increased sales and profitability. The company's strategic plans include the roll out of a customer loyalty program, reimagining its stores through raze and rebuilds, enhancing its food offerings, and improving...
