MIDDLESBORO, Ky., -- Heartland Inc. said that it has signed a letter of intent to acquire the stock of the Lee Oil Co., Lee's Food Marts and Lee Enterprises Inc. The Lee businesses have operations in the states of Virginia, Tennessee and Kentucky with headquarters in Middleboro, Ky. The acquisition includes all of Lee Oil's assets including supply contracts already in place.
Lee Oil operates 14 Lee Food Mart locations, offering BP, CITGO and Exxon-branded fuels, in the states of Tennessee and Kentucky.
The combined Lee companies' sales exceeded $104 million in 2007. The combined Lee companies meet the criteria established by Heartland's board of directors to pursue acquisitions that have a history of good cash flow in retail and light manufacturing that are located in the central part of the United States.
In 2007, Lee Oil sold 35,858,072 gallons of product, which represented a 3% increase over 2006. Sales in terms of overall dollars for the first half of 2008 have greatly exceeded 2007, Heartland said.
Existing management is in place to successfully operate this acquisition, so no additional overhead is required, it added. Terry L. Lee, president, CEO and chairman of the board of Heartland Oil, serves as CEO and president of Lee Oil, Lee Enterprises, Lee's Food Mart and other ventures.
Management said that it believes this acquisition will positively impact Heartland's bottom line immediately upon completion. In May, Heartland posted a profit of $401,756 on sales of $4,058,796 for the first three months of 2008. This compares favorably against a loss of $727,287 on sales of $3,401,070 for the same period in 2007.
Cumberland Gap, Tenn.-based Heartland is a 17-year-old public company that is developing broad product and service offerings—from heavy machining and fabricated steel products to oil distribution and retail—to provide economic protection and growth opportunities for investors. Heartland subsidiary Mound Technologies Inc., Springboro, Ohio, fabricates complete signs for gas stations and travel centers including aluminum panels and lighting. Clients include TravelCenters of America LC, Westlake, Ohio.