A bid from PetroSun Fuel of Seattle bested a slew of bids from other convenience store and petroleum operators who last month were hoping to snatch up the 600 remaining ConocoPhillips c-store and retail gas sites on the West Coast.
PetroSun’s newly created affiliate, Pacific Convenience & Fuel LLC, acquired the sites and joins the rank of powerhouse marketers in the competitive Pacific Northwest, Sam Hirbod, chairman and CEO of PetroSun Fuel and Pacific Convenience, confirmed to Convenience Store Decisions at presstime.
Circle K, Couche-Tard and 7-Eleven were just a few of the big players who were vying for the sites, but it was PetroSun’s affiliate, Pacific Convenience, that presented the best offer. The estimated value of the deal is about $800 million.
“There were some really heavy hitters submitting hundreds of bids,” Hirbod said. “We studied the things we thought were important and got granular on our bid process and put a robust bid out there. We worked with management to get everything that meets Conoco’s needs.”
ConocoPhillips announced two years ago it would divest itself of its convenience and gas retail operations, and over the past few years it had sold off a number of assets. PetroSun had actually acquired various operations from Conoco in the past, but nothing of this magnitude.
The latest sale will relieve ConocoPhilllips of all of its company-owned and company-operated petroleum and retail gas outlets in the U.S., as well as its company-owned and dealer-operated retail outlets in the Northwest, according to PetroSun.
Prior to the acquisition, PetroSun had 120 sites in four West Coast states. This new growth will expand the company’s overall presence to 10 states. More specifically, 75 of PetroSun’s existing petroleum and convenience retail sites in Washington and California will be folded into the new venture under Pacific Convenience & Fuel.
“We think that this footprint is going to allow us to compete in the marketplace,” Hirbod said, adding that retailers with good locations and effective marketing will be successful in this new environment. “As more companies leave the retail sector, we think the market is going to become a lot more fluid.”
The acquisition propels Pacific Convenience’s petroleum sales volume to a staggering one billion gallons annually, a pretty good jolt for a company that was a virtual unknown just a year ago.
As part of the transaction, Pacific Convenience will enter into long-term supply agreements with ConocoPhillips, continuing to use the Conoco, Phillips 66 and 76 retail brands at its stations. In conjunction with this move, Tower Energy Group, the nation’s largest independent petroleum wholesaler, has entered into an agreement with Pacific Convenience to supply fuel to the dealer sites in California.
As for branding the actual convenience stores themselves, Hirbod said more analysis needs to be done before making a definitive decision.
“We’re actually working through those options as we speak, looking at all the options that are available to us,” Hirbod said, adding that the company could continue with the Circle K brands currently at the stores.
Hirbod has more than 10 years experience in the industry, having operated and managed branded and unbranded petroleum retail and convenience stores in California and Washington.
Another co-founder of PetroSun, David Delrahim, has owned and operated gas stations, convenience stores and car washes throughout Southern California for the past 25 years.