DALLAS -- Following the integration of the Appalachian Oil Co., Titan Global Holdings Inc. has launched Titan Global Energy Group's acquisition plan in the petroleum distribution market segment. The plan is intended to capitalize on macro economic factors driving up the price of petroleum, as well as placing a financial strain on current petroleum distributors, it said. "Leveraging Appco's scale and management team expertise and macro economic energy factors, we are poised to 'rollup' petroleum distribution companies of various sizes and types in our adjacent markets," said Bryan Chance, president [image-nocss] and CEO of Titan Global Holdings.
"We formed Titan Global Energy Group 11 months ago to capitalize on the dynamic and often lucrative energy sector," said Chance. "We have successfully completed and integrated our acquisition of Appalachian Oil Co., a leading petroleum distribution company in the southeastern United States. Leveraging Appco's scale and management team expertise and macro economic energy factors, we are poised to 'rollup' petroleum distribution companies of various sizes and types in our adjacent markets."
Appco generated more than $400 million in annual revenues in fiscal year 2007. Today, Appco distributes petroleum products to more than 160 dealers and owns and operates 56 convenience store locations. Appco has more than 550 employees and maintains longstanding partnerships with strategic terminal operators and major oil companies.
Chance outlined the following macro economic energy factors contributing to Titan Energy Group's acquisition plan:
West Texas intermediate crude spot prices averaged $66 and $72 per barrel in 2006 and 2007, respectively. The current spot price for West Texas Intermediate crude oil is over $120 per barrel. The rising prices for crude oil in 2008 will result in higher prices for all petroleum products. Regular-grade gasoline is approaching $4 per gallon in 2008 in most markets, or $1.19 above the 2007 annual average price. World oil consumption is projected to grow by 1.2 million barrels per day (bpd) in 2008. As a result of the economic slowdown and higher petroleum prices, United States consumption of liquid fuels and other petroleum is expected to decline by approximately 190,000 bpd in 2008, according to the Energy Information Administration (EIA)."The continued rising cost of petroleum products is straining and increasing the amount of working capital necessary to operate retail and wholesale petroleum operations," said Marty Anderson, president of Appco. "While the consumers carry an increased burden for these rising costs of petroleum, small-to-intermediate-sized independent distributors and operators of petroleum at retail and wholesale locations are experiencing great financial strain. We are in discussions with a number of such parties involving acquisition plans that would provide a significant gain for the company, including for their ownership groups while providing Appco with a synergistic growth proposition. Appco has and will leverage its scale and relationships with major petroleum suppliers."
David Marks, chairman of Titan Global Holdings, said, "Titan will continue to pursue sound organic and strategic transactions that add shareholder value. The timing and nature of this plan makes sense for Appco and, additionally, provides a robust channel for our corporate focus and planned growth in the production and distribution of biofuels."
Titan Global Holdings is a diversified holding company with a portfolio of subsidiaries spanning international telecommunications, electronics and homeland security, consumer products and energy resources and distribution. Titan's operating divisions include Titan Global Energy; Titan's Communications Division; Titan Global Brands; Titan Card Services; and Titan's Electronics Division; and Titan's Homeland Security Division.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.