NEW HOLDING COMPANY AND CAPITAL FINANCINGS FIRST STEPS TOWARDS MULTI-BILLION DOLLAR PETROLEUM MARKETING VENTURE
OKLAHOMA CITY, April 15 -- Simons Petroleum, Inc., one of the nation's leading independent marketers of petroleum products, today announced the completion of a merger and investment transaction with a consortium of private equity firms whereby Simons will become the nucleus of an acquisition and growth strategy focused in the $225 billion petroleum marketing and distribution industry. Through a new holding company, SPI Petroleum, LLC ("SPI"), $90 million in initial capital has been committed to launching this venture: $50 million of equity commitment by three private equity firms and a $40 million senior debt facility being provided by PNC Bank, N.A., as well as Fifth Third Bank.
SPI's new investment partners include the private equity funds of Northwest Capital Appreciation (Seattle, Washington), RBC Capital Partners (through its private equity energy investment managers, Cadent Energy Partners, Purchase, New York) and Waud Capital Partners (Lake Forest, Illinois). The equity investors and Simons' management team believe that a tremendous opportunity exists to build a successful multi-billion dollar petroleum marketing enterprise, principally through acquisitions. SPI is well positioned to pursue this opportunity as a result of Simons Petroleum's marketing innovation and strong management, the equity groups' broad experience in consolidating industries and energy investment and the platform's substantial capital commitment.
Roger Simons will serve as SPI's Chief Executive Officer and retains the single largest economic interest in the company at closing. Additionally, the entire Simons management team and organization will remain intact and will be augmented with the addition of two seasoned acquisition executives, Chet Jachimiec who will serve as President of SPI and Rick Rouse who will serve as a Senior Vice President.
For more than 56 years, Simons Petroleum has been a privately owned, independent petroleum marketing and distribution company supplying fuels, lubricants, specialty chemicals and related products and services to the natural resources industry, including energy operators, drilling, exploration and production companies, other commercial and industrial accounts and governmental entities in 45 states. Further, to serve the national trucking industry, Simons developed the Pathway NetworkT ("Pathway"). Anchored by TravelCenters of America, and including other independent truckstops, Pathway represents a network of 185 full service truckstop facilities in 43 states. Through Pathway, Simons is able to deliver diesel fuel as well as a unique array of risk management programs and fuel procurement initiatives to transportation concerns nationwide. Simons has successfully grown its volumes thirty-fold over the last twenty-five years by focusing on its customers' needs and providing technology, high quality products and timely, reliable service.
CEO Roger Simons stated that in entering into this transaction, "our business strategy is to remain the best and to become the largest marketer and distributor of fuels, lubricants and related products and services in the United States through a combination of select strategic acquisitions and internal growth. SPI's strategy recognizes the opportunity to accelerate growth through acquisitions at a time when market conditions are especially favorable. We are thrilled to have three new investment partners whose investment commitment will help us become a multi-billion dollar petroleum distribution company over the next several years." Simons also indicated that consistent with SPI's strategy, a number of expansion opportunities and additional acquisition targets in selected markets are being evaluated.
Simons Petroleum's principal office will remain in Oklahoma City, Oklahoma, and an additional office, focused on corporate development and acquisitions will be opened in Houston, Texas. Simons will continue to operate substantially as in the past, offering customers flexible programs to manage their fuel cost without sacrificing reliability from over 400 supply points in 45 states. Simons Petroleum will continue to operate ten lubricant packaging and distribution centers with additional partnering arrangements of eleven other lubricants facilities across a total of 14 states. It will continue to operate two marine fueling and lubricant facilities (in Sabine Pass, TX and Cameron, LA) and expects to open a third marine fueling facility in Port Fourchon, LA in mid-2004. Press Archives
