On Chicago's Doorstep

Luke Oil purchases 12 Shell locations just outside metropolitan neighborhoods

Published in CSP Daily News

By  Abbey Lewis, Executive Editor

HOBART, Ind. -- Located in the Northwest corner of Indiana, butting up against Chicago's southernmost neighborhoods, are Lake and Porter counties. It is there in those bustling, industrial counties that Luke Oil acquired 12 Shell locations from RM Petroleum. "[The acquisition] has allowed us to become the premier Shell jobber in Lake and Porter counties...and it provides us a good platform to move into the Chicago market," Tom Collins, vice president of Luke Oil told CSP Daily News.

As reported in a CSP Daily News Flash yesterday, the deal, which has [image-nocss] been in the works for about a year, brings Luke Oil's total of Shell stores in the area to 22. The firm will operate five of the new sites, while the remaining seven will be run by tenants.

Luke has also announced its intention to complete another two-site acquisition by the end of November, and it's on pace to open three new locations under development by the end of the year. "We have an experienced management team and the proper financial capabilities in place to continue our growth strategy within the Great Lakes region," Collins said.

All 12 sites will remain under the Shell brand, but five of them will be transitioned to Luke retail locations, offering the company's extensive foodservice items, such as Noble Roman's Pizza and Broaster Fried Chicken.

"This was a good purchase for us [because it allows us] to control the Shell brand in Lake and Porter counties and therefore provide a more consistent offering to the customer," Collins said.

The company, which earned $500 million last year, will not comment on how much the Shell assets sold for. Collins did add, however, that though the nation's economy is tight, it's a buyer's market. "We've been on the sidelines for a couple years.... We had some capital set aside [for this acquisition]," he said. "We were well positioned for a purchase, and we just waited for the right time."

Family owned since 1967, Luke Oil is a regional wholesaler serving more than 100 dealers in and around the Chicago area. The company operates 25 retail locations and 10 car wash facilities. Originally a heating fuel supplier, Luke became a fuel jobber in Northwest Indiana in the early 1980s.

RM Petroleum is an independent petroleum distributor in Lake County, Ind., and is a part of R.S. Enterprises, Chicago. The company has more than 20 years of experience in petroleum retailing, convenience store and car wash operations. RM Petroleum supplies Shell-branded fuels to gas stations throughout Lake County.