Petrogram - Winter 2012 - (Page 18)
Out and about THE INDUSTRY
Fuel Marketing Businesses
When You’re Ready to Sell
Key Steps and Considerations
By Mark Radosevich, President, PetroActive Real Estate Services, LLC
ver the past few months we’ve experienced a heightened level of inquiries from marketers who are considering putting their businesses up for sale. This may be prompted by a number of factors including heightened fuel supplier credit requirements, competition or a general sense of long-term business uncertainty. Whatever the reasons, a large number of folks have decided that now may be the time to go. We estimate that there are over 4,500 wholesale fuels marketers across the country. They are comprised of various types and operational conﬁgurations including direct retail operators, dealer and commercial supply, and lubricants distributors. They are also heavily represented by multi-generational family businesses that focus on numerous business activities including retail operations, lessee dealer supply, open dealer supply, transport
operations and they serve commercial customers through one or more bulk plants. As more and more larger marketers begin to specialize in speciﬁc areas of emphasis like store operations or increased fuel volume distribution, the multifaceted jobber will experience higher levels of business volatility and competitive pressure, and will be more compelled to exit the industry. Marketers who desire to exit will ﬁnd that the following recommendations should enhance their success:
Focus on the value. Temper expectations of having a single buyer purchase the business in its entirety. A chain of stores usually has a few winners, some middle-of-the-road performers as well as some dogs. Salary operators will be hard pressed to purchase many of the average
stores and most of the dogs. Dealer buyers will generally focus on stores with monthly inside sales volumes above $50,000. Forcing the dogs into the prospectus as an all or none proposition will not garner optimal value for the overall chain. Based upon sales volume and store conﬁguration factors, employ two or more sales strategies to more efﬁciently divest the chain. Insisting that the commercial operation be made a part of a single transaction will also inhibit qualiﬁed buyer response. This piece and the transport business should be isolated so that appropriate buyers can be recruited. Accurate sales and proﬁtability assessments for these business segments must be made apart from the retail components and with realistic G &A allocations. This may require development of a separate sales prospectus for presentation to appropriate buyers of these business parts.
18 | View past issues of Petrogram online at www.fpma.org.
Table of Contents for the Digital Edition of Petrogram - Winter 2012
2012 FPMA Patron Members
Advertisers’ Centerspread Marketplace
Congress Postpones Big Decisions in 2012
Annual Golf Tournament a Success!
Out and About the Industry
Antitrust Compliance: Ignorance Is Not Bliss
FPMA 2013 Calendar of Events
Index of Advertisers/Advertiser.com
Petrogram - Winter 2012