MIDLAND, Texas -- United Fuel & Energy Corp., a distributor of gasoline, diesel, propane and lubricant products to customers in the rural markets of the southwestern and southcentral United States, said that is has entered into a definitive purchase agreement to acquire substantially all of the assets of Reamax Oil Co. Inc., Camp Verde, Ariz.
The assets include one bulk plant and five cardlock sites.
The acquisition is expected to be funded with a combination of cash, United Fuel & Energy common stock and seller financing. [image-nocss] Closing of the transaction is expected to occur in April 2007, subject to, among other things, the satisfactory completion of due diligence.
Based on Reamax's unaudited financial statements, Reamax's revenues for the 12-month period ended Dec. 31, 2006 were approximately $39.8 million.
Chuck McArthur, United Fuel & Energy's president and CEO, said, This acquisition provides us a first-rate entrance into Arizona as we continue to expand our footprint into new geographic areas. Central Arizona has proven to be a highly profitable market for Reamax Oil, which has been serving the region for the last 17 years under the leadership of Wayne Monasmith, who has 26 years of experience in this industry. He has done an excellent job of cultivating a diverse and loyal client base of commercial, agricultural and mining companies, as well as individual accounts. We are pleased that Wayne will be joining United Fuel & Energy to help us grow the business in Arizona.
United Fuel & Energy, Midland, Texas, is engaged in the business of distributing gasoline, diesel, propane and lubricant products primarily in certain rural markets of Texas, New Mexico and Oklahoma. It said that it intends to continue to expand its business through strategic acquisitions.
United Fuel currently engages in the following activities: Cardlock operation (unattended refueling of commercial vehicles); wholesale fuels and lubricants (to commercial customers); and propane distribution (to commercial and residential users).
United Fuel conducts its operations through 20 branch locations and approximately 105 cardlock (unattended) fuel sites.
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