Case Study: Matrix Announces the Successful Sale of Apache Oil Company, Inc.
- Apache Oil Company, (“Apache”or the “Company”), founded in 1992 and headquartered in New London, Connecticut, operated a petroleum marketing and retail fuels distribution business in the northeast, primarily concentrated around New York City, New York and Boston, Massachusetts. The Company’s asset base consisted of 27 commission marketers, 12 lessee dealers, and 56 wholesale supply accounts, marketing under a variety of fuel brands, including Shell, Sunoco, ExxonMobil, Citgo, and Gulf.
- The Company’s shareholders contacted Matrix in 2015 to consider strategic alternatives. Matrix provided the shareholders with a market based valuation and discussed the primary value drivers for the business. The shareholders decided not to consider a sale at that time and instead focused on continuing to grow and improve the business to optimize value at a later date. In 2018, the shareholders reached back out to Matrix and asked for an update to the valuation based on the Company’s improved performance and the M&A market at the time. Based on the updated valuation, they made the strategic decision to divest their petroleum marketing and fuels distribution business in order to focus on Willy’s Fuels, LLC, a related entity supplying commercial fuels to customers in the heavy construction, pipeline logistics, and oil field services industries.
- It was also the expressed desire of the shareholders to retain the real estate control at a significant number of Apache sites and subsequently lease these highly desirable real estate assets to the buyer post-closing.
- To customize, execute, and complete a confidential sale process that would allow the Company’s shareholders to realize maximum after-tax value upon the sale of the fuels distribution business, while also generating a considerable rental income stream through the retention of real estate at 22 strategically located properties
- Matrix provided merger and acquisition advisory services to Apache, which included valuation advisory, development of a customized sale process designed to meet shareholder goals, marketing of the business through a confidential, structured sale process, and negotiation of the transaction.
- Matrix assisted in the negotiation of the asset purchase agreement and the real estate lease agreements for assets in which Apache would retain real estate control post-closing. Matrix also coordinated the due diligence and closing processes for the transaction, which closed in June 2019.