Loves To Acquire 30 Flying J / Pilot Locations

Pilot Travel Centers and Flying J are planning to divest about 30 locations (10-15 of which are Pilot locations) to Love’s Travel Stops and Country Stores, for an estimated $3 million to $5 million per location, The Trucker reported.

The move is an attempt by Pilot and Flying J to alleviate concerns the Federal Trade Commission (FTC) has about antitrust implications of their combination.

Under the transaction, Love’s would grow its regional presence from 5.5- 6.9% of the interstate fuel lanes, or about 60% and 30% of the fuel lanes for TA/Petro and Pilot/Flying J, respectively.

However, recent reports revealed the combined market share of Pilot and Flying J as merged entities apparently will not be as large as originally expected.

The combined market share resulting from the combination of the Pilot and Flying J locations indicates the new operation would have 16% of the interstate locations and 23% of the fuel lanes, according to www.truckstops.com.

Still, The Trucker reported that one knowledgeable industry participant believes the combined market share of the Pilot and Flying J locations would exceed 50% of the interstate diesel fuel market because these two operations, along with TravelCenters of America and Petro Stopping Centers, have a disproportionately higher share of the business of the large national trucking companies because of their extensive national networks. This would lend Pilot and Flying J more purchasing power and an ability to acquire increased market share.

The success of the deal depends on the approval of the FTC, the successful execution of its operating plan, and the future refinancing of its high level of intermediate term debt, The Trucker reported.

Meanwhile industry sources told Truckinginfo.com the merger is complete, while a spokesperson for Flying J and Pilot said the companies are waiting on FTC approval. Sources also told Truckinginfo.com that many Flying J employees have been handed 60-day notices of termination at the company’s Ogden, Utah, headquarters, a sign a merger is near.

 

Hot Fuel Allegations

Flying J also is facing protests from a North Virginia man named James Graham, who is suing the company for selling him “hot fuel,” according the Wall Street Journal. Graham claims Flying J’s Chapter 11 bankruptcy plan allows Flying J to escape more than 24 lawsuits.

These suits allege that Flying J shortchanged truckers and other retail gas and diesel purchasers by selling them motor fuel at temperatures higher than the industry standard of 60 degrees Fahrenheit. Selling fuel at higher temperatures-which takes up more volume but has less energy-is known as selling “hot fuel.”

If Flying J “truly wants to confirm a nonimpairment plan, then the rights of the hot fuel claims must ride through this bankruptcy unaltered,” Graham’s lawyers said Friday, according to the Wall Street Journal.

 

 

 

 

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