Anabi Nabs 88 Shell Sites

Central Valley Fund invests $4.25 million in gasoline wholesaler-retailer for acquisition

Published in CSP Daily News

By
Greg Lindenberg, Online Editor

UPLAND, Calif. -- Anabi Oil Corp. has acquired Shell Oil Co.'s interests in 88 Shell-branded retail locations in California, 56 of which are in the Los Angeles area and 32 of which are in the San Francisco area. This includes 15 leased locations and the right to supply 52 Shell-branded retail locations owned by independent open dealers.

The agreement closed on July 7, Shell spokesperson Karyn Leonardi-Cattolica told CSP Daily News. According to the terms of the agreement, the price is confidential.

"In 2005, Shell Oil Products US announced its vision of being [image-nocss] the best fuels supplier in the United States," she added. "To achieve this, Shell has been transitioning markets from a direct-delivered fuel model to a wholesale-delivered model. The changes are transparent to consumers and services are not interrupted."

All of the sites acquired by Anabi Oil will continue to operate under the Shell brand and will continue to sell Shell-branded fuels.

The Central Valley Fund, a private investment fund focused on middle market Central Valley companies, announced its arrangement of an $8.5 million mezzanine investment in Anabi Oil and its affiliates. CVF and its co-investor, San Diego-based Huntington Capital, partnered to support the company's acquisition of certain Shell-branded retail gasoline properties and related wholesale distribution rights in Northern and Southern California. The transaction will help Anabi Oil effect expansion to underserved markets in the Central Valley and the Inland Empire.

Founded in 1991 with a single station, Anabi Oil has steadily grown its site base and reputation by running high-quality stations in strategically selected locations that maximize customer traffic at the retail pump and in the convenience store. With this acquisition, part of a larger divestiture effort by Shell Oil Products U.S. of 200 stations in California, the company supplements its existing portfolio in Southern and Northern California.

The company not only upgrades its existing owner/operator portfolio with this acquisition, but also significantly expands its revenue base by gaining rights to distribute gasoline to at least 80 stations throughout California. This second aspect of the transaction enables Anabi Oil to become a major regional player with retail property interests, operational responsibilities and wholesale distribution capabilities throughout the state.

Jose Blanco, a partner with CVF, said, "We are pleased to be a part of Anabi Oil's expansion as it broadens its operating platform to include wholesale gasoline distribution. As Shell Oil and other major diversified oil companies have divested retail stations and distribution assets as part of a heightened focus on exploration and production, opportunities have arisen for the better independent operators, like Sam and Rene Anabi, to purchase and accelerate the performance of these assets through their unique product and service models."

Sam Anabi, Anabi Oil's president, said, "Becoming a wholesaler for Shell Oil is a much anticipated milestone for the company. Given the size and scope of the acquisition, my wife, Rene, and I sought out a mezzanine capital partner who could support us in completing the transaction and, more importantly, in successfully integrating this new channel of business into our platform. CVF and Huntington Capital are the right complement to our hands-on management style. We look forward to their insight as we continue our effort to cement the company as a major regional player."

The Central Valley Fund was established by the principals of Gael Partners LLC to finance later-stage growth through mezzanine and preferred-equity investments. The fund has offices in Davis and Fresno, Calif. It is focused on making investments in California's Central Valley and throughout the state.

Upland, Calif.-based Anabi Oil and its affiliates operate as a diversified distributor, retailer and owner of motor gasoline products and properties throughout California. Beginning in 1991 with a single property in Baldwin Park, Calif., the company now carries various interests in 120 properties throughout California; 89 of these properties are situated in Southern California; 31 properties are held in Northern California.