OCALA, Fla. -- Florida-based Diamond Oil will shine on in the Nashville market with its purchase of 28 Kwik Sak stores from bankrupt Purvi Petroleum. The $18.1 million sale took place nearly two years after Purvi filed for bankruptcy protection in 2004.
"This acquisition is another step in Diamond's growth strategy," said Jay Patel, Diamond Oil's CEO. "We are actively seeking acquisitions where our fuel distribution services and in-store sales expertise can quickly impact underperforming stores."
The stores were originally part [image-nocss] of Marathon Ashland Petroleum, a joint venture of Marathon Oil and Ashland Inc. Purvi acquired the 28 stores in 2002, but could not turn a profit, according to Gary Murphey of Resurgence Financial Services LLC, Atlanta. Murphey came in as chief restructuring officer in 2005 and later became the trustee of the properties.
"We restructured the operations and immediately commenced turning a profit," Murphey said. "Although we paid off millions of debt and there will likely be a distribution to unsecured creditors, it was clear that additional investment was needed to take these stores to the next level."
"That's where Diamond comes in," said Patel. "With the squeezing of fuel profits, our focus has been on maximizing inside sales. With fuel margins so thin that you have more profit in a cup of coffee than 5 gallons of gas, it doesn't take long to figure out where your priorities should be," he concluded.
Diamond Oil LLC in based in Ocala, Fla.
All of the Kwik Sak sites were branded Marathon, but were sold unbranded and as is. The properties are located in the greater metropolitan Nashville area, including Antioch (2), Brentwood (1), Columbia (3), Franklin (1), Gallatin (2), Hermitage (3), La Vergne (1), Murfreesboro (5), Nashville (5), Old Hickory (1) and Smyrna (3).
As previously reported in CSP Daily News, Purvi Petroleum filed for bankruptcy protection in November 2004, claiming assets of between zero and $50,000, and debts between $10 million and $50 million. The two largest debtors, according to court documents were Speedway SuperAmerica, owed $3.3 million, and Presto Food Stores, due $561,000.
Purvi Petroleum III, a unit of Orlando, Fla.-based Purvi Petroleum, bought the stores from Speedway SuperAmerica LLC in early 2002. Its related entities also operate a dozen stores in Florida and South Carolina.
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