Private equity firm CVC Capital Partners has told investors it plans to sell its stake in Pilot Travel Centers, according to a Bloomberg News story.
Bloomberg said it had seen a filing to investors, which said that CVC may sell its remaining stake in Pilot in two stages -- in January 2015 and June 2017 -- to the Haslam family's Pilot Corp.
The story cited an unnamed source who said the value of that stake would be more than $2 billion.
In an interview on Friday, CVC managing partner Chris Stadler told the News Sentinel that "there have been no final decisions made between us and the Haslam family as to ... how we will ultimately exit our stake."
Asked about the controversy regarding diesel fuel rebates at Pilot -- including an ongoing federal investigation -- Stadler said that "we're comfortable that all the right things are being done to resolve it. That is not driving our decisions in any way."
It's not uncommon for private equity firms to sell their stake in portfolio companies after several years. According to the Private Equity Growth Capital Council, an advocacy group based in Washington, D.C., private equity funds typically invest in companies for three to seven years.
Mitch Steenrod, chief financial officer at Pilot, said the company talks constantly with CVC about the terms of their exit. "The framework that was described by Bloomberg was a framework we have discussed with CVC," he said, "but there's nothing executed, there's nothing committed, and most importantly it has nothing to do with the (rebate) situation we're managing here."
Knoxville-based Pilot is the country's largest chain of truck stops and travel centers. In 2008, Marathon Ashland Petroleum LLC sold its 50 percent stake in Pilot Travel Centers LLC for $700 million to Pilot Corp. at the same time that Pilot Corp. announced a separate deal to sell a 47.5 percent interest in Pilot Travel Centers to CVC.
CVC subsequently reduced its stake in Pilot to less than 20 percent.
Earlier this year, a Pilot spokeswoman said the Haslam family owns 59 percent of the company, through an entity called Pilot Corp., and that 41 percent is owned by "other unaffiliated third parties."
A report filed in Kentucky indicated that other owners of the company include Chicago-based BDT Capital Partners; Miguel Loya, of Houston; LS Squared LP, of Rogers, Ark; Brad Martin, of Memphis; and Enterprise Investment Partners LP, also of Memphis.
The rebate controversy erupted in April, after federal officials raided Pilot's headquarters. An ongoing criminal investigation into alleged rebate fraud against trucking companies has netted seven guilty pleas.
The company also was hit with multiple civil lawsuits, and reached a settlement in which it offered to fully repay any company that was shorted on fuel rebates, plus 6 percent interest and attorneys' fees. Some companies have opted out of that settlement, and are filing separate lawsuits against Pilot.
The development could result in more lawsuits being filed against Pilot Flying J by aggrieved customers.
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