The Smell of Victory

Published in CSP Daily News

Investment firm to acquire petroleum distributor that supplies 50 stations

CORAL GABLES, Fla. -- After months as a relatively dormant company, Capital Solutions I Inc., is looking to get into the convenience retailing industry. The Coral Gables, Fla.-based corporation has signed a letter of intent to acquire Victory Petroleum Inc. and its 27 stores.

Miami-based Victory has been in the business of distributing gasoline for Exxon for five years and more recently for Chevron and Texaco, in the South Florida area. Victory supplies 50 gas stations, and last year, the company distributed approximately 50 million gallons of gasoline, [image-nocss] it said.

We own 27 stores in South Florida. Most of them are Exxon. A couple are Texaco, Carlos Fontecilla, president of Victory Petroleum, told CSP Daily News. Victory is just the distributor. We don't operate our stores, we just rent them to dealers and we sell them the gas.

Fontecilla said he expects the final purchase agreement to include the lease agreements so the current operators can continue to run the stores. He said a definitive purchase agreement could be negotiated by Friday, July 15.

Although the letter of intent suggests Capital Solutions will acquire all 27 stores, their real estate, their lease agreements and Victory's petroleum distributorship business, Fontecilla said he will continue working with the company in some capacity. I'm staying, said Fontecilla, who has been in the industry for 20 years. [I'll be] working with them; not in the company, but with them.

The aggregate purchase price for the transaction is expected to be approximately $46 million, subject to adjustments. The transaction will be subject to the completion of due diligence and other customary closing conditions. There is no assurance this transaction will be completed, the companies said.

Until recently, Capital Solutions has been relatively dormant, in search of a merger partner. On May 26, 2005, the company acquired Bedrock Holdings Inc., whose principals are said to be experienced in the areas of capital investments and markets.