Arnold Dodderer – Sunoco LP

It’s quite a different corporate animal from 15 years ago. So muses Arnold Dodderer about the more recent evolution of what’s become the Sunoco Limited Partnership.

The company that’s now the nation’s largest independent fuel distributor was in constant flux long before Dodderer joined its legal staff in 2007. However, the most consequential changes seem to have happened since then with more enroute.

“We are facing an energy transition in our country,” he tells Vanguard in November. “We strive to be the best at distributing traditional fuels, while moving more into logistics and looking to add new income streams.”

Arnold Dodderer | General Counsel | Sunoco LP

He won’t go into much detail, but if the past is any indicator, Sunoco LP’s future is certain to be dynamic. Dodderer’s watch began when the partnership’s predecessor was bought by Dallas-based Energy Transfer Partners in 2012, migrating its leadership from Philadelphia to the Big D. It’s largely divested of its retail stations in favor of selling fuel wholesale and, in 2015, returned to the New York Stock Exchange.

With the proceeds, it lowered its debt load and expanded its distribution network of convenience stores, independent filling stations and commercial customers in 30-plus states. It’s been closing nearly two transactions annually for almost a decade, and around $850 million worth just in 2021.

“We buy assets and companies at attractive multiples,” says Dodderer, who, as general counsel, spearheads the due diligence, contract negotiation and legal support provided by his team. “We find the bargains, the complex opportunities and the hidden gems.”

Among the notables: The 2021 deals for eight refined products terminals from NuStar Energy and another terminal from Cato Inc. That, and so many other deals, enables Sunoco LP to better serve its customers, Dodderer says.

Covering all bases

And it’s really about service, he goes on to explain. Fuel itself is a commodity that’s distributed into a fiercely competitive market. According to Dodderer, Sunoco LP must differentiate itself by how efficiently it brings that fuel to market. That’s what the acquired terminals and all-around operational repurposing have been about.

“We’re able to buy bulk on a scale that other independent distributors just don’t have,” he says. “And unlike the other major brands, we aren’t burdened by the need to distribute fuel that we’ve refined.”

Getting here took some doing with credit due Dodderer and a legal department that’s gone from 40 to a dozen members. While talking with Vanguard, Dodderer channels his inner Billy Beane, the former Oakland A’s general manager whose teams overachieved despite low payroll.

“It is like baseball where you make use of utility players,” Dodderer says. “If you have good players with a variety of skills and a desire to win, you can leverage cross-functional capabilities and sustain an offense with less overhead. Wins come from runs, and you get runs from your players hitting and reaching base. As a legal team, we reach base when our business partners succeed in their endeavors.”

This cross-functional approach has those under Dodderer’s wing stepping out of traditional legal roles. All are expected to nurture relationships with internal clients and weigh in on business matters. Should a commercial deal or acquisition not be consummated, he’ll want to know what else his team could have done, even if it’s not a traditional legal function or their responsibility per se.

“We’re like Navy SEALS,” he says. “We are a small, but fierce group that can’t afford to let anybody down.”

Adding by subtraction

Asked for specifics, Dodderer cites a 2018 deal in which 7-Eleven bought over 1,100 Sunoco locations in 18 states for $3.3 billion. The Federal Trade Commission had to be convinced the transaction would not disrupt competition in Eastern markets ranging from Boston to Miami.

The legal team satisfied those concerns, arranging for Sunoco to sell its 1,100 stations to 7-Eleven while agreeing to purchase around 50 7-Eleven locations to ensure competition in certain markets. As part of the deal, 7-Eleven agreed to buy the company’s fuel for the next 15 years, locking in distribution volumes at the stores it divested.

Dodderer says the win-win result positioned Sunoco to focus on its midstream and wholesale roles which, among other things, necessitated the recent purchase of the NuStar and Cato terminals, bringing the company’s total to 25. The finances stabilized, he says Sunoco LP is positioned for other opportunities, which could evolve it to be an Amazon-style fuel logistics company.

By energy industry standards, it’s a streamlined company with only 2,500 employees and, of course, a lean legal staff. But Dodderer envisions boom times and assures there’s much potential for professional growth—and that innovators need apply.

Mother’s son in best sense

Dodderer says he’s glad to have come to Sunoco after seven years of honing his transactional skills, oftentimes on behalf of energy clientele, with legal powerhouse K&L Gates. In-house law is where one really can make a mark on a company and the energy industry—something he learned while wearing a fireproof suit and inspecting refineries as a younger man.

His background is the bluest of collars, as was his late mother’s. Dodderer was just five when his father died, leaving his mother to support two children as a journeywoman pipefitter in their native Arkansas and other Southern and Midwestern states. So strong was her work ethic that after an accident resulted in financial burden, she and a teen Dodderer spent more than a year making 100 burritos every night for her to sell the next morning before her workday began.

“A remarkable woman, all 100 pounds of her,” Dodderer says. “She gave me the courage to try for what seemed out of reach.”

Higher education initially seemed so, with Dodderer laboring as a hard hat for years after high school. Finally in 1993, at 25, he enrolled at the University of Arkansas-Monticello while juggling part-time work. Seven years later, he graduated University of Michigan Law School while doing the same.

Dodderer’s hardscrabble younger days have given way to creature comforts that include a house on a golf course and a prized Corvette driven by his wife. The couple have a daughter who is a nurse, a lawyer son and four grandchildren. He has them sharing the outlook that got him where he is.

“Work hard but find joy along the way,” he advises. “And thanks Mom!”

View this feature in the Vanguard Spring I 2023 Edition here.