Matrix Capital Markets Group, Inc. is an independent, advisory focused, privately-held investment bank. Since 1988, Matrix has provided merger & acquisition and financial advisory services to privately-held, private-equity owned and publicly traded companies.
Situation
After successfully advising Tri Gas & Oil Co., Inc. (“Tri Gas & Oil”) on an acquisition in 2020, Tri Gas & Oil approached Matrix during the third quarter of 2021 regarding a very sizeable potential acquisition opportunity of Pep-Up, Inc. (‘”Pep-Up”), a leading propane, refined fuels and HVAC services company based on the Delmarva Peninsula.
Over the last 45 years, Pep-Up has grown to one of the largest suppliers of propane, refined fuels, and HVAC services on the Delmarva Peninsular. Pep-Up serves ~23,000 residential, agricultural, commercial, and industrial customers.
The McMahan family (shareholders of Tri Gas & Oil) and the Pepper family (shareholders of Pep-Up) had a longstanding friendship, and the Peppers were looking to transition their customers and employees to a company with similar values. The acquisition would be a perfect geographical fit relative to Tri Gas & Oil’s existing operations on Delmarva and increase its market share.
Objective
Matrix was engaged to advise Tri Gas & Oil on the valuation of the acquisition opportunity, to assist in the development of operating and financial assumptions, to provide guidance on the structure and terms of the offer and asset purchase agreement, and to assist Tri Gas & Oil with refinancing its credit facilities.
Solution
Matrix developed a comprehensive financial model to evaluate the acquisition and to analyze the projected post-acquisition performance of the consolidated company. The financial model included several unique scenarios that allowed for different operating and financial assumption sets to be utilized in order for Tri Gas & Oil to easily perform sensitivity analyses and to estimate returns on debt and equity for the acquisition.
Matrix assisted in preparing a letter-of intent (LOI) offer for the acquisition opportunity and advised on the terms of the asset purchase agreement.
Matrix developed a presentation outlining the key highlights of the acquisition and the projected performance of the consolidated entity post-closing. Alongside Tri Gas & Oil’s management, Matrix presented the financial model to lenders to help secure debt financing on the most favorable terms possible.
Tri Gas & Oil closed on the transaction in June 2022.
Situation
MXL Industries, Inc. (“MXL”), founded in 1968 and headquartered in Lancaster, PA, is a highly regarded manufacturer and coater of specialty-crafted optical engineered thermoplastic parts to a wide-range of blue-chip customers for various military, aviation, motorsports, life safety, and athletic applications.
After initiating a buyout for MXL in 2008, the management and ownership team consisted of: Jim Eberle, President; Bryan Bess, Chief Financial Officer; Jude Krady, Chief People Officer; and Manny Rodriguez, Chief Sales Officer; along with a minority partner employed in the business.
Objective
Matrix was retained by MXL’s ownership group to initiate a sale process to provide Mr. Bess with a full liquidity event as he looked to retire and provide the rest of the team with the option of exiting their ownership.
Management also sought partnership that would provide the Company with capital for continued growth while retaining the strong culture the management team cultivated at MXL.
Solution
Matrix tailored a process to properly account for different liquidity solutions between strategic and private equity buyers which led to over 30 indications of interest in the market.
Successfully negotiated with a private equity backed strategic buyer to acquire the business and related-party real estate and provide all of management with full liquidity at a premium valuation.
Situation
Haywood Oil Company, Inc. d/b/a Peak Energy (“Peak” or the “Company”) was incorporated in 1952 as a local home heating oil delivery company. In 1973, David Blevins left Exxon to become President of Haywood Oil Company.
Todd Blevins became President of Peak in 1999 and continued the legacy of growth by making seven acquisitions over the next ten years, transforming the Company into a leading petroleum marketer and fuels distributor.
The Company is headquartered in Waynesville, NC and operates two primary business segments that serve customers throughout western North Carolina, as well as parts of South Carolina, Georgia and Tennessee.
The convenience retail, petroleum marketing and wholesale fuels business consisted of 11 company-owned locations and served over 100 wholesale customers and the commercial fuels and heating oil business sold refined fuel products through 2 bulk plant locations.
Matrix was initially retained to perform a valuation of the Company. After considering the likely valuation range that could be achieved through competitive sale processes for the separate businesses, Todd Blevins decided to engage Matrix to sell the businesses.
Objective
The Company engaged Matrix on July 10, 2021 to customize, execute, and complete a confidential sale process and to try to have a closing prior to December 31, 2021 in order to maximize after-tax net proceeds with potential capital gains tax increases beginning in 2022.
Solution
Matrix provided merger and acquisition advisory services to Peak, which included valuation advisory, marketing of the business through confidential, structured sale processes, and negotiation of the transactions.
In order to maximize total proceeds, Matrix recommended marketing Peak’s convenience retail and wholesale fuels business separately from the commercial fuels and heating oil business.
Multiple competitive offers were received for both businesses, and Majors Management, LLC was ultimately selected as the acquirer for the convenience retail and wholesale fuels business and Colonial Oil was selected as the acquirer for the commercial fuels and heating oil business.
After consultation with the Company’s tax advisors and given the tight timeline to close both transactions before December 31st to avoid any potential capital gains tax increases, Matrix recommended focusing Company resources on the closing of the much larger convenience retail and wholesale fuels business.
The transaction with Majors Management LLC closed in December 2021, ~5 months after Matrix was engaged and the transaction with Colonial Oil closed in June 2022.
Situation
CEFCO Convenience Stores, wholly owned by Fikes Wholesale, Inc., operated 250 stores across Texas, Louisiana, Arkansas, Alabama, Mississippi, and Florida.
The Company sought to optimize its convenience store operations by selling smaller format stores that could not be repositioned to its preferred operating format and to utilize the funds raised from the divestment to support new store growth and remodeling existing stores. CEFCO’s strategic review identified 50 stores that did not fit its long-term strategy due to smaller store formats, geographic location and/or not meeting brand objectives.
Objective
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 50 convenience stores identified for divestment.
Solution
Matrix provided merger and acquisition advisory services to CEFCO, which included valuation advisory, marketing of the business through a confidential, structured sale process, and negotiation of the transactions.
Multiple competitive offers were received. BreakTime Corner Market L.L.C was selected to acquire 48 0f the stores and Refuel Operating Company, LLC was chosen to acquire two stores in Mississippi. Maintaining flexibility and selling the assets in two separate transactions yielded the highest value for CEFCO.
Matrix assisted CEFCO and their tax advisors to understand the tax implications of various transaction scenarios to maximize after-tax proceeds to the shareholders.
Matrix assisted in the negotiation of the purchase agreements and lease agreement and coordinated the due diligence and closing process.
The transaction with Refuel Operating Company, LLC closed in December 2021 and the transaction with BreakTime Corner Market L.L.C. closed in May 2022.
Situation
Miller Oil Company Inc. (“Miller” or the “Company”) was founded in 1977 by “Gus” Miller when he purchased Exxon Company USA’s home heating oil business in Norfolk, VA. The Company experienced significant growth through the 1980’s as the business expanded into convenience retailing and petroleum marketing. In the 2000’s, the Company expanded its fuels distribution business into southern Florida.
Jeffrey “Jeff” Miller, Gus Miller’s son, was President, and had managed the businesses for the last 25 years.
The Company operated 21 petroleum marketing and convenience retail stores, 2 company owned dealer sites, and over 70 wholesale dealer accounts.
Matrix was engaged to perform a valuation of the Company.
After meeting with Gus Miller and Jeff Miller to go over the valuation and recommended sale process, the shareholders ultimately decided to exit the retail convenience store, petroleum marketing, and fuels distribution businesses to diversify family wealth and focus on other ventures.
Objective
To customize, execute, and complete a confidential sale process that would allow the Company’s shareholders to realize maximum after-tax value.
Solution
Matrix provided merger and acquisition advisory services to Miller, which included valuation advisory, marketing of the business through a confidential, structured sale process, and negotiation of the transactions.
In order to maximize total proceeds, Matrix recommended marketing Miller’s wholesale fuels business in Florida separately from the Virginia and North Carolina convenience retail and wholesale fuels business.
Multiple competitive offers were received. Global Partners LP and Sunshine Gasoline Distributors Inc. were ultimately selected as the acquirers for the Virginia/North Carolina and Florida assets, respectively, Selling the Florida business separately yielded significantly more value for Miller. As part of the Global transaction, Miller was able to retain certain real estate and lease the real estate to Global Partners LP.
Matrix assisted Miller and their tax advisors to understand the tax implications of various transaction scenarios to maximize after-tax proceeds to the shareholders.
Matrix assisted in the negotiation of the purchase agreements and lease agreement and coordinated the due diligence and closing process.
The transaction with Sunshine Gasoline Distributors Inc. closed in November 2021 and the transaction with Global Partners LP closed in February 2022.
Situation
Global Partners LP (NYSE: GLP) (“Global” or the “Company”) entered into an agreement to purchase the retail fuel and convenience store assets of Consumers Petroleum of Connecticut, Inc. (“Consumers”) in December 2020.
After an antitrust review by the Federal Trade Commission (“FTC”), Global and Consumers were required to divest certain sites associated with the Global and Consumers transaction under the terms of the FTC’s proposed consent order concerning that transaction.
Matrix was engaged by Global to conduct a confidential and structured sale process of select assets located in Connecticut and to structure a potential transaction pursuant to the terms of the FTC’s proposed consent order.
Objective
To customize, execute, and complete a confidential sale process that would allow Global to realize maximum after-tax value upon the sale of select assets located in Connecticut while simultaneously satisfying the FTC’s antitrust review of the initial transaction with Consumers.
Solution
Matrix provided merger and acquisition advisory services to Global, which included valuation advisory, marketing of the business through a confidential, structured sale process, and negotiation of the transaction.
Multiple competitive offers were received, and Petroleum Marketing Group (“PMG”) was ultimately selected as the acquirer.
Matrix assisted Global and their FTC counsel to ensure the transaction with PMG would satisfy the terms of the FTC’s consent order.
Matrix also assisted in the negotiation of the purchase agreement and coordinated the due diligence and closing process.
The transaction with PMG closed in January 2022.
Situation
Melvin L. Davis Oil Company, Inc. (“Davis” or “the Company”), a third-generation family business that was founded in 1956, was a premier fuel, food, and convenience retailer in South-Central Virginia, with two truck stops, two traditional c-store locations, and multiple quick service restaurants.
Matrix’s relationship with Davis first began in 2009, and over the following years, Matrix advised the Company on numerous matters.
In the summer of 2021, the existing shareholders decided it was time to sell the Company and diversify their wealth.
Objective
To customize, execute, and complete a confidential sale process that would allow Davis’s shareholders to realize maximum after-tax value upon the sale of the Company.
Solution
Matrix provided merger and acquisition advisory services to Davis, which included valuation advisory, marketing of the business through a confidential, structured sale process, and negotiation of the transaction.
Matrix assisted Davis and its tax advisors in understanding various corporate matters and the tax implications, particularly regarding the tax uncertainty that existed at that time, of different transaction and valuation scenarios.
Multiple competitive offers were received, and Petroleum Marketing Group (“PMG”) was ultimately selected as the acquirer.
Matrix assisted in the negotiation of the purchase agreement and transition services agreement and coordinated the due diligence and closing process.
The transaction with PMG closed in late December 2021.
Situation
Under various predecessor entities, but through continued related family ownership, the Company operated retail convenience stores with fuel in west Texas since the early 1970’s. In 2001, Tyler and Monica Wolfe purchased the business from Monica’s father, Frank Ligon and in 2008 began rebranding the convenience stores under the Jack’s banner.
In 2014, Penta Operating, LLC was formed when four former Town & Country Food Stores executives, consisting of Alvin New, Devin Bates, Randy Brooks and Robert Eggleston, invested in the Company alongside the Wolfes.
The Company’s retail petroleum assets consisted of 9 high-quality, company-operated petroleum marketing and convenience retail stores, one Jack’s Lube & Wash oil change and car wash location, and one oil change with fuel location. In total. seven of the eleven locations operated a combination of in-bay or tunnel car washes.
The owners contacted Matrix in June 2021 regarding a potential sale of the assets, partly due to capital gains tax rates potentially increasing in 2022. Matrix was asked to perform a valuation of the Company’s assets and recommend a sale process to maximize value, with the sale needing to occur in 2021. Based on the valuation feedback provided, the shareholders decided to market the assets for sale in order to diversify wealth and focus on other ventures.
Objective
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 portfolio.
Solution
Matrix provided merger and acquisition advisory services to Penta Operating, LLC, which included valuation advisory, marketing of the business through a confidential, structured sale process, and negotiation of the transaction.
Matrix ran a very efficient process focused on strict deadlines for buyers in order to maximize the probability of a closing in 2021 and likely favorable tax rates.
Multiple competitive offers were received, and Monfort Companies was selected as the acquirer.
Matrix assisted in the negotiation of the purchase agreement and coordinated the due diligence and closing process.
The transaction with Monfort Companies closed in December 2021.
Situation
Haywood Oil Company, Inc. d/b/a Peak Energy (“Peak” or the “Company”) was incorporated in 1952 as a local home heating oil delivery company. In 1973, David Blevins left Exxon to become President of Haywood Oil Company. The Company grew through multiple acquisitions that brought additional convenience stores, bulk plants, and fuel brands to the business.
Todd Blevins became President of Peak in 1999 and continued the legacy of growth by making seven acquisitions over the next ten years, transforming the Company into a leading petroleum marketer, fuels distributor and foodservice business.
The Company is headquartered in Waynesville, NC and operates two primary business segments that serve customers throughout western North Carolina, as well as parts of South Carolina, Georgia and Tennessee.
The convenience retail, petroleum marketing and wholesale fuels business consisted of 11 company-owned locations and served over 100 wholesale customers and the commercial fuels and heating oil business sold refined fuel products through 2 bulk plant locations.
Matrix was initially retained to perform a valuation of the Company. After considering the likely valuation range that could be achieved through a competitive sale process, Todd Blevins decided it was the right time to sell the convenience retail, petroleum marketing and wholesale fuels business.
Objective
The Company engaged Matrix on July 10, 2021 to customize, execute, and complete a confidential sale process prior to December 31, 2021 in order to maximize after-tax net proceeds by avoiding any potential capital gains tax increases in 2022.
Solution
Matrix provided merger and acquisition advisory services to Peak, which included valuation advisory, marketing of the business through a confidential, structured sale process, and negotiation of the transaction.
Multiple competitive offers were received, and Majors Management, LLC was ultimately selected as the acquirer.
Matrix assisted in the negotiation of the purchase agreement and coordinated the due diligence and closing process.
The transaction with Majors Management LLC closed in December 2021, ~5 months after Matrix was engaged.
Situation
Berger & Burrow Enterprises, Inc. d/b/a Dynamic Mobile Imaging (“DMI” or the “Company”) is the largest independently owned provider of mobile x-ray and ultrasound services in the United States with operations in 12 states across the eastern half of the U.S. as well as Washington, D.C.
Founded in 2005 as a family business, the Company continues to be founder-owned and operated.
DMI is a premier provider of portable digital x-rays, ultrasounds, EKGs, holder monitors, echocardiograms and dopplers to patients in skilled nursing facilities, assisted living homes, correctional facilities, universities, and home settings, as well as for sports teams and others who are unable to be transported easily.
In addition, DMI was the first mobile x-ray and ultrasound company to earn The Joint Commission’s Gold Seal of Approval®.
The Company’s shareholders decided to explore their strategic options and consider potential exit opportunities that could reward them for the successful business they had built and reduce their future risk, while also enhancing DMI’s positioning for further expansion across the U.S.
Objective
DMI strives to become a leading national mobile imaging provider through sustained expansion into new territories, while continuing to provide patients with expedited, safe and effective care supported by its commitment to superior technology and high-performance standards.
The Company was seeking a buyer that was culturally aligned with its vision and standards of care and able to commit the resources and support necessary to accelerate DMI’s trajectory.
DMI engaged Matrix to provide merger & acquisition advisory services, which included marketing the transaction, advising on valuation, deal structure, and other transaction terms.
Solution
Prior to launching the marketing of the transaction, Matrix guided DMI through a sell-side quality of earnings process to ensure that marketed financials were accurate and defendable and to reduce transactional risk later in the process.
Matrix led a confidential, tailored transaction process including both strategic and financial prospects in order to maximize the opportunity for success, given DMI’s objectives and the broader market environment.
Ultimately, DMI sold to True Health Navigation LLC d/b/a DispatchHealth (“Dispatch”), the nation’s first comprehensive in-home medical care provider, to expand and enhance Dispatch’s growing mobile diagnostics service line.
Situation
ICAT Logistics, Inc. (“ICAT”), founded in 1993 and headquartered in Elkridge, MD, operates as an agency-based freight forwarder specializing in creative, custom transportation solutions to meet its customers’ needs both locally and across the globe.
Objective
Owner Richard “Rick” Campbell engaged Matrix to serve as the Company’s financial advisor after an unsuccessful one-off dialogue with a potential investor.
Mr. Campbell required that Matrix seek a financial partner that could provide him with a liquidity event, a medium-term transition path, and growth capital for the business.
Impediments
As a result of the COVID-19 pandemic, ICAT’s largest end-market, tradeshows, experienced substantial business disruptions and had a meaningful impact to the business’s performance.
Outside of the tradeshow market, COVID-driven global supply chain constraints created an optimal pricing environment for ICAT’s services. The sustainability of the improved performance in the business was questioned by numerous financial buyers.
ICAT’s largest and most tenured agency partner was responsible for a large portion of the Company’s revenues, which gave certain investors hesitation.
Solution
Matrix launched a broad process to roughly 700 potential suitors and closed the transaction at premium valuation above client expectations in less than five months.
Matrix presented normalized financial performance using a data-driven COVID adjusted EBITDA to help provide buyers with context behind the additional growth that could be acquired.
In addition to purchase price, Matrix was able to yield additional consideration for Mr. Campbell through an advantageous working capital target, tax structuring considerations, and compensation related to his go-forward employment and ownership of ICAT-leased real estate.
Situation
Slidell Oil Company, LLC (“Slidell” or the “Company”), founded in 1948 and headquartered in Slidell, Louisiana, operated a petroleum marketing and retail fuels distribution business in Alabama, Louisiana, and Mississippi.
The Company’s asset base consisted of 16 commission marketer sites, one lessee dealer, and 23 wholesale supply accounts marketing under the Shell, Chevron, and Texaco fuel brands.
The 16 commission marketer sites were large, well-maintained stores and sported consistent branding and merchandise offerings, providing a buyer with the option to operate these stores and generate additional profitability.
The Company’s shareholders contacted Matrix in 2017 to discuss a potential transaction. Matrix provided the shareholders with a market valuation and discussed with them the primary value drivers for the business. The shareholders decided to focus on growing and improving the business to optimize value at a later date. Matrix advised on potential methods to derive additional value, including installing favorable provisions in commission marketer agreements that would allow a buyer to operate these stores if desired.
The shareholders reengaged Matrix in 2021 to update the valuation. The shareholders then made the strategic decision to divest their petroleum marketing and fuels distribution business in order to diversify their family wealth.
Objective
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 business.
Solution
Matrix provided merger and acquisition advisory services to Slidell, which included valuation advisory, marketing of the business through a confidential, structured sale process, and negotiation of the transaction.
Multiple competitive offers were received, and Circle K Stores Inc. was ultimately selected as the acquirer.
Matrix assisted in the negotiation of the asset purchase agreement and the real estate lease agreements for assets where Slidell would retain real estate control post-closing, and also coordinated the due diligence and closing processes for the transaction. The transaction closed in December 2021.
Situation
Tri-State Petroleum Corporation (“Tri-State” or the “Company”) was founded in 1974 by Edward J. Coyne, I and Elizabeth J. Coyne as an Atlantic Richfield distributor of tires, batteries, and automotive accessories. In the late 1980s and early 1990s, the Company implemented a strategic plan to expand into retail fuel marketing, by leveraging supply contracts with BP, Exxon, Citgo, and Sunoco, and acquiring two portfolios from BP in the mid-1990s, including company-operated convenience stores and wholesale dealer accounts.
The founders’ children, Colleen McGlinn, Erin Merrick, Sheila Romanek, and Edward Coyne, II, all joined the business during the 1980s and ‘90s, and, collectively, have managed the transformation of the Company into one of the leading Marathon distributors and convenience retailers in its trade area.
The Company operated 25 petroleum marketing and convenience retail stores, eight wholesale dealer accounts, and two commercial fuels bulk plants.
Matrix was engaged to perform a valuation of the Company and advise on a sale process. The shareholders ultimately decided to exit the retail convenience store, petroleum marketing, and commercial fuels businesses to diversify family wealth and focus on other ventures.
Objective
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 Tri-State or its assets.
Solution
Matrix provided merger and acquisition advisory services to Tri-State, which included valuation advisory, marketing of the business through a confidential, structured sale process, and negotiation of the transaction.
Multiple competitive offers were received, and Majors Management, LLC was ultimately selected as the acquirer.
Matrix assisted Tri-State and their tax advisors to understand the tax implications of various transaction scenarios to maximize after tax proceeds to the shareholders.
Matrix assisted in the negotiation of the purchase agreement and coordinated the due diligence and closing process.
The transaction with Majors Management LLC closed in December 2021.
Situation
Diversified Energy, LLC (“Diversified,” “Diversified Energy,” or the “Company”) operated a leading, full-service retail propane distribution company based in North Carolina.
Founded in 2000 by 19 of North Carolina’s Electric Membership Cooperatives, Diversified was formed in pursuit of an alternative energy source to market to customers in the region.
After the co-ops’ initial investment in the core North Carolina propane business, the Company further expanded its geographic footprint in 2000 with the acquisition of J.F. Energy Corp. located in Mount Joy, Pennsylvania.
Over the next two decades, Diversified grew its operations to 8 retail branches and 12 bulk plants, offering propane sales, service, and appliances to a customer base of over 19,000.
Matrix was retained to perform a strategic review of the Company for the executive committee board of Diversified Energy. After consultation with the executive committee and the full board of directors, the board voted to explore a potential sale of Diversified to focus on their core electric businesses. Matrix was retained to advise and execute on the sale process.
Objective
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 Diversified Energy.
Solution
Matrix provided merger and acquisition advisory services to Diversified, which included valuation advisory, marketing of the business through a confidential, structured sale process, and negotiation of the transaction. The sale process included a buyer pool of privately owned, regional and national propane marketers, large, public companies, and private equity firms.
Multiple competitive offers were received, and ultimately Sharp Energy, Inc. (“Sharp”), a subsidiary of Chesapeake Utilities Corporation (NYSE: CPK), was selected as the buyer.
Matrix assisted in the negotiation of the purchase agreement and coordinated the due diligence and closing process.
The transaction with Sharp closed in December 2021.
Situation
Southern Counties Oil Co., L.P. d/b/a SC Fuels (“SC Fuels” or the “Company”), founded in 1930, was one of the oldest and largest, family-owned petroleum distributors in the U.S., selling over 1.4 billion gallons of fuel, 10 million gallons of lubricants, and 5 million gallons of DEF annually.
The Company had a rich history of growth and evolution which led them to serve more than 11,000 customers annually, ranging from small family-owned businesses to Fortune 500 companies, throughout the Western, Midwestern, and Southwestern U.S.
In addition to operating 47 proprietary cardlock locations, SC Fuels delivered branded and unbranded gasoline, diesel fuel, alternative fuels, lubricants, and other petroleum products, as well as offered fleet card programs.
The Company’s assets included 47 cardlocks, 13 bulk plants, ~20 warehouses, ~145 open dealers, ~20 fuel transports, ~125 tank wagon units, and numerous other properties and vehicles.
After growing the Company both organically and through acquisitions, the Company’s shareholders engaged Matrix to perform a strategic review of each business unit and the enterprise as a whole, in order to explore various potential exit points now and in the future.
The shareholders ultimately decided to exit the industry in order to diversify their wealth into other business and charitable ventures.
Objective
To customize, execute, and complete a confidential sale process in a way that would allow the Company’s shareholders to realize maximum after-tax value upon the sale of the Company.
Solution
Matrix provided SC Fuels with merger and acquisition advisory services, which included valuation advisory, marketing the business through a confidential, structured sale process, and negotiation of the transaction.
Based upon a long-standing relationship between the principals of Pilot Company (“Pilot”) and SC Fuels, Pilot was approached on a pre-emptive basis, and Matrix assisted in the negotiation of the equity purchase agreement, coordination of the due diligence process, and structuring the post-closing lease agreements between SC Fuels and Pilot.
The transaction with Pilot closed in November 2021.
Situation
W.H. Rusher and Son, later Rusher Oil Company (“Rusher” or the “Company”) was founded in 1963 by W.H. Rusher as a commission marketing agent with Amoco Oil Company. Later, Bob L. Rusher reoriented his father’s company towards retail fuel sales, purchasing some of the most desirable real estate in its marketing territory for service stations.
Bob L. Rusher’s sons, Bobby and Joey Rusher, joined the business in the 1980s and over the next several years continued to grow by building new-to-industry stores and remodeling older locations. During this time, Rushco Food Stores Inc. was organized and became a successful chain of retail convenience stores and car washes.
Immediately prior to sale, Rusher Oil Company distributed Amoco and BP fuels to 19 branded convenience stores and one commissioned marketer location within a 20-mile radius of its Salisbury, North Carolina headquarters, and Rushco Food Stores, Inc. operated 19 branded convenience stores under the name Rushco Markets.
Matrix was engaged to perform a valuation of the Company and advise on a sale process. The shareholders ultimately decided to exit the retail convenience store and petroleum marketing business to focus on other ventures.
Objective
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 Rusher or its assets.
Solution
Matrix provided merger and acquisition advisory services to Rusher, which included valuation advisory, marketing of the business through a confidential, structured sale process, and negotiation of the transaction.
Multiple competitive offers were received, and Sampson-Bladen Oil Company, Inc. was ultimately selected as the acquirer.
Matrix assisted Rusher and their tax advisors to understand the allocation of the purchase price to each entity and the tax implications of a sale to maximize after tax proceeds to shareholders.
Matrix assisted in the negotiation of the purchase agreement and coordinated the due diligence and closing process.
The transaction with Sampson-Bladen Oil Company, Inc. closed in November 2021.
Situation
E.J. Pope & Son, Inc. (“EJP” or the “Company”) operated a leading petroleum marketing, convenience retailing, and QSR business in eastern North Carolina.
EJP was founded in 1919 as a coal hauling business by horse-drawn wagon. The Company opened its first convenience store, operating under the Handy Mart store brand, in 1975 in Mount Olive, NC. In 1994, the Company began co-branding stores with nationally recognized foodservice brands in order to enhance the store offerings.
Under the leadership of President E.J. “Judson” Pope III, the Company grew into a highly recognized regional chain of 36 convenience stores with 21 co-located branded QSRs or proprietary foodservice offerings situated across eastern North Carolina.
The Company, via its sister entity Pope Transport, also hauled its own fuel and acted as a common carrier for other third-party hauling customers.
Previously, in 2012, the Company engaged Matrix to divest certain non-core assets. EJP then reengaged Matrix in 2021 to market the entirety of its convenience store business so that the shareholders could focus on the Company’s other businesses and diversify their family wealth.
The shareholders desired to execute a post-closing hauling agreement with the acquirer in order to generate a revenue stream for Pope Transport.
Objective
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 convenience store business, while also generating considerable income through the execution of a hauling agreement.
Solution
Matrix provided merger and acquisition advisory services to EJP, which included valuation advisory, marketing of the business through a confidential, structured sale process, and negotiation of the transaction.
Multiple competitive offers were received, and GPM Investments, a wholly owned subsidiary of ARKO Corp (Nasdaq: ARKO), was ultimately selected as the acquirer.
Matrix assisted in the negotiation of the purchase agreement and coordinated the due diligence and closing process.
The transaction with GPM Investments closed in November 2021.
Situation
Jacksons Food Stores, Inc. (“Jacksons” or the “Company”) owns, operates, and supplies more than 1,340 stores across nine western states. The Company is vertically integrated, with fuel supplied by Jacksons Energy, full-line grocery and supplies distributed through Capitol Distributing and fresh food products supplied through Capitol Kitchen.
Pursuant to 7-Eleven’s acquisition of Speedway from Marathon Petroleum Corp., the Federal Trade Commission (FTC”) required 7-Eleven to divest 293 locations.
Jacksons approached Matrix during the fourth quarter of 2020 regarding the potential acquisition of Speedway divestiture assets.
The Company was interested in the Western package of the Speedway divestiture, which included 62 Speedway and 7-Eleven branded convenience stores in California, Arizona and Nevada (“the Portfolio”).
Objective
Matrix was engaged to advise Jacksons on the valuation of the Portfolio, assist in the development of operating and financial assumptions, structure and negotiate the terms of the Company’s offer and review and advise on financing alternatives.
Solution
Matrix developed a comprehensive financial model to evaluate the acquisition and to analyze the projected post-acquisition performance of the Portfolio. The financial model’s many variables allowed the Company to easily perform sensitivity analyses on unique scenarios for the Portfolio and to estimate returns on equity using different operating and financial assumptions.
Matrix assisted Jacksons in preparing its formal offers for the Portfolio and in preparing materials regarding the acquisition for the Federal Trade Commission.
Matrix also advised on the terms of financing utilized to consummate the transaction.
Jacksons closed on the purchase of the final store in the 62-store Portfolio on October 4, 2021.
The successful acquisition is part of a continued focus for Jacksons on growth and expansion into additional markets across the Western U.S. and resulted in the Company gaining 58 stores in attractive California markets, where it had little or no presence prior to the transaction.
Situation
The Spencer Turbine Company (“Spencer”), founded in 1892 and headquartered in Windsor, CT, is a complete designer and manufacturer of air and gas handling systems for industrial, municipal, commercial, and institutional customers requiring blower or vacuum applications.
In 2007, the Company was acquired by Alliance Holdings, Inc., who successfully completed acquisitions and subsequent divestitures of multiple subsidiaries, all while helping Spencer grow into one of the most qualified manufacturers of air and gas handling equipment in the world.
Objective
Matrix was retained by Alliance Holdings, Inc. to sell 100% of the Company with a goal of maximizing proceeds and positioning the Company and its management team for future growth.
Impediments
Legacy legal issues and divestment decisions created obstacles for structuring a transaction that optimized value and minimized risk for all parties.
Spencer’s management team, particularly its finance leadership positions, experienced significant turnover in the years leading up to closing. This resulted in certain financial inconsistencies that had to be navigated during the marketing and Quality of Earnings processes.
Beginning in early 2020, the Company had significant business disruptions resulting from the COVID-19 pandemic. The effects of such, which included employee furloughs, supply chain disruptions, and softened financial results, persisted through the date of closing.
Spencer’s operations had multiple characteristics that limited the potential buyer universe, including ongoing asbestos litigation, a defined benefit retirement plan, a decade-plus lease for its primary manufacturing facility, and deferred capital expenditures, among others.
Solution
Matrix presented normalized financial performance using a data-driven COVID adjusted EBITDA, which was ultimately used to value the business and help maximize proceeds.
All potential transactional hurdles were discussed with the ultimate buyer prior to diligence to help streamline the closing process and eliminate surprises while under exclusivity.
