2021-01-04 04:51:32 EST
Calif. Fuel Marketer Valley Pacific Buys Cross Petroleum; Terms Undisclosed
Valley Pacific Petroleum Services, one of the largest marketers in California, has acquired Cross Petroleum for undisclosed terms, EnergyExits, the advisory firm for Cross, said in an announcement Monday.
The deal includes 65 open dealers, seven bulk plants and seven cardlock facilities in Northern California, EnergyExits said. Cross, of Redding, California, distributes wholesale fuel, bulk fuel, lubricants and home heating fuel to a semirural customer base between the Sacramento, California, region and the Oregon border, the advisory firm said.
The transaction increases Valley’s annual fuel volume by about 20%. Nathan Crum, president and CEO of Valley, estimated his company’s volume at 350 million gal per year, split evenly between gasoline and diesel, including biodiesel and renewable diesel. Despite the firm’s size, Crum said in an interview, as a family-owned and operated business that likes to “take good care of its employees,” Valley plans to stay within California and expand “opportunistically.”
“We have over 300 employees. We are not looking to get to 1,000,” he told OPIS. “As other marketers decide to hang up their cleats, we’re here to help them out. We want to continue to have the feel of a family business. We take care of employees and have high employee retention.”
Cross Petroleum’s employees will continue working for Valley, Jimm Cross, president of Cross Petroleum, said in an interview, adding that the sale was the “right thing to do” for the Cross family and its employees. The business was founded in 1961 by Royal and Gladys Cross, according to the company’s website. The family still has non-petroleum investments in various rental properties and the mini-storage business, Cross said.
“They are all working for a much larger company now,” he told OPIS. “There’s still a lot of consolidation going on. We saw this as an opportunity. We were very measured and careful with the process.”
The sale process took a total of two years, including a few months “respite” because of the uncertainty created by the COVID-19 pandemic, said Doug Milner, managing partner of EnergyExits, in an interview. Buyer and seller were otherwise unaffected by the pandemic, Milner said.
Cross Petroleum has been a successful, third-generation family business, with annual gallonage “in excess of 60 million,” he added. It was a good time to sell, with downstream petroleum business valuations high, and potential tax increases looming under a Biden administration, Milner said, noting the transaction closed on Dec. 31.
Valley has averaged an acquisition every 18 months in recent years, and revenues have grown to nearly $1 billion from $27 million in 1994, Crum told OPIS. He said Valley is Chevron’s largest marketer in California and has branded supply contracts with 76 and Valero, as well. The company also supplies rural dealers under its private-label Patriot brand. Of Valley’s 200-unit gas station network, only two sites are company-operated, he said.
About half of Valley’s business is supplying dealers — the rest is servicing the agricultural industry, Crum said. “Nine of the top 10 agricultural counties in the country are in California and we service eight of the nine,” he told OPIS.
Established in 1947, Valley traces its roots to Durrel Woolsey, who joined Standard Oil as a commissioned agent, according to an online company history. In 1954, Woolsey became a wholesale distributor for the company and in 1970, he established Woolsey Oil Co. as an independent marketer. In 1994, the business was sold to current owner Norm Crum.
–Reporting by Donna Harris, dharris@opisnet.com; Editing by Barbara Chuck, bchuck@opisnet.com
Copyright, Oil Price Information Service |
