NEW YORK -- Uzi Yemin of Delek US said he knows why major oil companies are selling their stores. “They 're not retailers,” he said. He also said he knows an opportunity when he sees one. “We went through the same cycle before, and when everybody says, ‘Get us out [of retailing] now, ' we 're the first ones in line to say, ‘Bring it over'.”
Speaking at the William Blair & Co. Growth Stock Conference in New York, Yemin (pictured), president and CEO of Delek US, spoke proudly of the company he founded in 2001, during what he called a similar atmosphere [image-nocss] to the current economy.
“I 've been through this cycle. In 2001, we were here,” he said. “The amazing years that we had [in 2006 and 2007], we had them based on the acquisitions that we did in 2001 through 2005. That 's happening again right now, and the fact that we have such a healthy balance sheet … allows us to continue to consolidate some of the stores.”
Most notably, Yemin pointed to the 2,100 stores ExxonMobil announced this month it will sell off in the next few years. “If you look at the Exxon announcement, you see that they are pulling away from Nashville, Memphis, Dallas, all these areas that we are in either with our refining assets or the c-store assets,” he said.
He also pointed to small independent retailers who are having time making ends meet as a brewing opportunity.
“You 've probably seen that a lot of companies are going out of business. And some companies, their value is going down so bad that you have to ask yourself, ‘Is that the business to be in? ',” he said. “But we don 't want to pay seven and eight times multiples. We want to pay four and five times. We don 't want to pay the highest multiples on the highest EBITDA ever. We want an average EBITDA. And that 's how we made our money.”
Yemin also wasn 't shy about sharing his reasons why major oil companies, including ExxonMobil, ConocoPhillips, BP and Shell are exiting retail operations.
“If Exxon doesn 't want to be in retail, it means two things,” he said, “first, that they think their return is better somewhere else, but second, Exxon is an energy company; they are not a retail company. They don 't have the culture for a retail company.”
Since coming to the United States in 2001 to establish Delek US in Brentwood, Tenn., Yemin has grown the diversified downstream company into a 500-store chain—under the Mapco Mart and Mapco Express banners—with ownership in two U.S. refineries.
“When I came here, the investors in Israel gave me two things; they gave me lessons in English and $40 million,” he said. “Well, my English is still not good enough, and the $40 million dollars…well, this year our sales are north of $4 billion.… Our net income went from $6.5 million to close to $100 million.”
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