Mutually Exclusive Divestment Deal

Published in CSP Daily News

Mutual Oil exits business of managing retail assets with sale of 19 gas stations/c-stores

BROCKTON, Mass. -- In a divestment intended so that it can focus exclusively on its wholesale business as it is no longer in the business of managing retail assets, Mutual Oil Co. Inc. has sold 19 gas station and convenience store wholesale assets to multiple buyers including Waltham, Mass.-based Alliance Energy LLC, a wholly owned subsidiary of Global Partners LP, and various regional jobbers and individual store operators.

The sale was announced in July 2012 (see Related Content below for previous coverage).

As reported in a Raymond James/CSP Daily News Flash, Mutual conveyed fee simple interests in 17 of the sites and leasehold interests in two of the sites. The company has entered into long-term contracts to supply fuel to many of the buyers, primarily under its proprietary Mutual fuel brand.

Founded in 1937, Mutual grew to become one of the largest and most diversified privately held petroleum distributors in the United States.

In 2003, the company exited the directly operated retail business to focus solely on the wholesale distribution and transportation of fuels. As part of this conversion, it leased its retail assets to East Meadow, N.Y.-based Getty Petroleum Marketing Group Inc. (GPMI) in Jan. 2003. On Dec. 5, 2011, GPMI filed for Chapter 11 bankruptcy reorganization, and on March 27, 2012, GPMI rejected the master lease that contained Mutual's sites. Since then, Mutual has leased the sites to individual licensees and rebranded and supplied fuel to all of the sites primarily under the Mutual brand.

( Click here for previous CSP Daily News coverage of GPMI's financial woes.)

Mutual is owned and operated by Ed Rachins and Steve Shaer.

Matrix provided merger and acquisition advisory services to Mutual, which included valuation advisory, transaction structuring, marketing and negotiating. Tom Kelso, managing director and head of the Energy & Multi-Site Retail Group; Spencer Cavalier, director; Sean Dooley, associate; and, Andrew LoPresti, senior analyst managed the transaction.

"Our relationship with Mutual began back in 2006, and it has been our privilege to serve as their financial advisor over the years. We were delighted to have the opportunity to work closely with the Mutual team to monetize the value of the assets that Steve and Ed have held for many years," said Cavalier.

Phillip Lapatin of Holland & Knight served as legal counsel for Mutual.

Matrix's Energy & Multi-Site Retail Group provides transactional advisory services to companies in the downstream energy and multi-site retail sectors including c-store chains, petroleum marketers, fuels distributors, retail propane distributors, heating oil distributors, lubes retailers and distributors, terminal operators, fuels transportation companies, hospitality companies and other specialty retail chains. Matrix Capital Markets Group is a leading middle-market investment bank based in Richmond, Va.

Global Partners LP, a publicly traded master limited partnership., owns, controls or has access to one of the largest terminal networks of refined petroleum products and renewable fuels in the Northeast. Global Partners is a leader in the logistics of transporting crude and other products from the mid-continent region of the United States and Canada to the East Coast.

Alliance Energy and Global Partners own, operate, supply or manage more than 900 gas stations and convenience stores in the Northeast. Alliance Energy serves as a marketing arm to Global Partners, marketing and operating its c-stores and stations.

Brockton, Mass.-based Mutual Oil is one of the largest independent gasoline distributors in New England. Since its founding in 1942, the company has grown to become a major distributor of CITGO, Valero, BP, Gulf, Shell, Sunoco and Mobil brands, as well as unbranded fuel, to independent dealers throughout New England.