HOUSTON -- Consolidated Medical Management Inc. (CMMI) said that the company will not move forward with the previously announced acquisitions of Troutman Oil Co. Inc., and US Fuel International Inc.
CMMI is a wholesale fuel distributor and fuel terminal operator based in Houston. It offers storage, delivery and blending of petroleum products such as gasoline and diesel fuel, as well as offers biodiesel to the growing "green" fuels market.
"After thorough due-diligence and the evaluation of adding both Troutman Oil and US Fuel [image-nocss] to our current operations, the board of directors has decided not to purchase the companies," commented Timothy G. Byrd Sr., Houston-based CMMI's CEO. "The company will only forfeit the $10,000 deposit paid concurrent with the signing of the original purchase agreement."
He added, "We were impressed with Troutman's and US Fuel's organizations; however, the board believed the addition of retail locations with convenience stores would defocus company resources and slow progress of our business plan to capture the majority of 'downstream' profits from reselling, storing, terminalling, blending and distributing fuels. The company remains focused on this second phase of our business plan, and currently expects to soon secure a line-of-credit to facilitate movement into what we believe is the most lucrative portion of the supply chain, the wholesaling of fuel the company currently is storing, blending and terminalling."
In late October, when the deal was first announced, Byrd had said, "The addition of Troutman's distribution infrastructure, retail network and the US Fuel brand to our current terminalling operation moves us closer to establishing CMMI as a fully integrated fuel supplier, distributor and retailer, and positions us to capture profits throughout the downstream chain."
Byrd had added that the acquisition was expected add more than $23.5 million to the company's revenue. Terms of the agreement had CMMI purchasing the stock of Troutman Oil, US Fuel and certain assets held individually by its shareholders for $5 million in cash, $900,000 in debt and 666,680 shares of CMMI convertible preferred stock valued at $1 million.
Austin, Ark.-based Troutman Oil distributes fuel to retail outlets throughout Arkansas and owns and operates 12 branded US Fuel stations in the mid-South. US Fuel is a fuel marketing company that sells fuel under the US Fuel trademark. US Fuel, Austin, currently has a private-label US Fuel brand credit card program with more than 3,000 active cards establishing brand loyalty with its customer base.
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