Matrix Serves as M&A Advisor on the Successful Sale of Quarles Petroleum
Quarles Petroleum, Inc. (“Quarles” or the “Company”), based in Fredericksburg, Virginia, was founded in 1940 by Douglas Quarles Sr. and his son, Douglas Quarles Jr. by purchasing The Home Oil Company in Warrenton, Virginia. Quarles expanded significantly over the years, both organically and through acquisitions, including marquee transactions such as Dixie Gas & Oil and Revere Gas Incorporated. At one time, the Company was one of the largest propane and refined fuels distribution companies in the U.S., serving over 80,000 residential and commercial customers throughout Virginia, Maryland, Delaware, West Virginia, Pennsylvania, and North Carolina.
The Company operated through several distinct business lines: a propane, heating oil and commercial fuels distribution business (collectively “Delivered Fuels”); and additional divisions for fleet fueling, wholesale dealers, and lubricants. The Company’s assets included approximately 30 bulk plants, 120 unattended Quarles- branded cardlocks, 65 private site cardlocks, and 45 dealer assets.
Matrix was initially retained to perform a strategic review of the enterprise to explore various potential exit options, including the possibility of a break-up sale to multiple different buyers that would maximize value. Matrix performed the valuation analysis and presented multiple options for consideration by the Company’s shareholders. After a great deal of reflection, the shareholders ultimately decided to exit the industry in order to diversify their wealth and focus on other ventures.
Quarles then engaged Matrix to provide merger and acquisition advisory services, which included devising a bifurcated sale, marketing of the business through a confidential, structured sale process, providing updated valuation guidance to the client as the process unfolded, and negotiation of the transactions. Throughout the process Matrix’s goal was to customize, execute, and complete a confidential sale process that would allow the Company’s shareholders to realize maximum after-tax value.
The sale process also included a buyer pool of regional and national propane marketers and refined fuels distributors as well as private equity groups seeking an industry platform. Matrix executed this customized sale process to solicit offers for the entire company and for discrete operating divisions to determine the best path forward.
Multiple offers were received, and ultimately it was determined that maximum value for the shareholders could be achieved by selling the Company to two different buyers. Matrix assisted in the negotiation of two separate purchase agreements, a transition services agreement, multiple shared site agreements, and coordinated the due diligence processes and multiple closings.
The Delivered Fuels business was sold to Superior Plus in June 2022 and the fleet fueling, wholesale dealers, and lubricants business lines were sold to GPM Investments LLC in July 2022.
About Matrix’s Downstream Energy & Convenience Retail Investment Banking Group:
Matrix’s Downstream Energy & Convenience Retail Investment Banking Group is recognized as the national leader in providing transactional advisory services to companies in the downstream energy and multi-site retail sectors including convenience retailing, petroleum marketing & distribution, propane distribution, heating oil distribution, lubricants distribution, petroleum logistics, terminals and car washes. Group members are dedicated to these sectors and draw upon complementary experiences to provide advisory services to complete sophisticated merger and acquisition transactions, debt and equity capital raises, corporate valuations, special situations and strategic planning engagements. Since 1997, our Downstream Energy & Convenience Retail Investment Banking Group has successfully completed over 270 engagements with a total transaction value of more than $13 billion.
Vance Saunders, CPA
Managing Director & Principal
Richmond • Baltimore