PROVO, Utah-- Petroleum Wholesale LP continued its expansion into Utah with the acquisition of most of one of the state's largest gasoline jobbers, Mike Peterson Oil Co. The sale, which closed in May, included 13 stores.
Mike Peterson, whose company held a dominant share of the gasoline-supply market in the Salt Lake Valley, told the Salt Lake Tribune he decided to sell his company because the "timing, the opportunity and the offer was right." Terms of the deal were not disclosed.
We're among the largest jobbers in the [image-nocss] state, and they are one of the largest in their market," Peterson told the newspaper, noting that with his company's assets, Petroleum Wholesale will be a much more formidable competitor in Utah and nationally.
Petroleum Wholesale's general counsel Stuart Lapp said the Houston-based company owns approximately 200 convenience stores and travel centers in eight states. It operates some and leases some to other operators. Peterson, however, retained six of his Utah c-stores, Lapp said. "He'll be one of our customers."
Founded 34 years ago, privately held Petroleum Wholesale annually sells, transports and delivers more than 500 million gallons of fuel a year to several hundred customers, according to the report. Acquiring Peterson Oil is expected to increase that volume significantly.
Petroleum Wholesale entered the Utah market in mid-2003 by acquiring some assets of Tri-Valley Distributing though a bankruptcy court sale. Its other Utah assets include Holt Oil, Sperry Oil and Terry Oil. To date, however, the company primarily has operated in southern Utah. "Our acquisition of Peterson Oil gives us a much larger presence throughout the state," Lapp said.
John Hill, state director of the Utah Petroleum Marketers & Retailers Association, said there are approximately 110 jobbers in Utah. Their numbers, however, have declined during the past 10 years because of a major consolidation trend in the industry.
And Mike Peterson Oil was one of the companies on the leading edge of that trend. In late 2003, at about the same time that Petroleum Wholesale was entering the Utah market, Provo, Utah-based Mike Peterson Oil acquired ChevronTexaco Corp.'s retail operations in Salt Lake County in a deal worth $60 million to $65 million, according to industry estimates. Prior to that acquisition, Mike Peterson Oil already owned seven Chevron-branded c-stores in Utah County that operated under the Extra Mart name. It also held contracts to supply an additional 24 independently owned Chevron locations in Utah Valley.
Peterson estimated then that the addition of ChevronTexaco's retail operationsthe sale included more than a dozen Chevron-owned stores and contracts to supply another 55 independently owned branded outletswould push his company's annual revenue from $80 million to approximately $300 million. "This is a huge move for us," Peterson said at that time, estimating that once the sale closed, his company would have a "virtually unheard of" 30% market share in the Salt Lake Valley.
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