World Fuel Services to Acquire Western Petroleum

Expands unbranded wholesale land segment, adds aviation fuel distribution
MIAMI -- World Fuel Services Corp. said that its wholly owned subsidiary, World Fuel Services Inc., has signed a definitive agreement to acquire the capital stock of Western Petroleum Co., including the assets comprising Western Petroleum's wholesale motor fuel distribution business, branded aviation fuel distribution business and wholesale lubricants distribution business.

Eden Prairie, Minn.-based Western Petroleum, with 2009 volumes of more than 500 million gallons of gasoline and diesel fuel and approximately 100 million gallons of branded aviation fuel, is one of the [image-nocss] nation's largest independently owned petroleum marketing companies.

Western Petroleum offers the AMSTAR fuel brand and Bases Loaded Ballpark Kitchen foodservice brand to petroleum marketers.

The purchase price for the transaction will be $95 million which may be increased by up to an additional $20 million to the extent that Western Petroleum's net assets exceed an agreed target at closing. Up to $30 million of the purchase price, and up to $10 million of the additional purchase price, if payable, may be paid, at World Fuel Services' option, in the form of World Fuel Services common stock, valued based on an agreed trailing average price formula. World Fuel Services may be required to issue the common stock if its market price at the relevant settlement date exceeds the trailing average trading price by more than an agreed amount. The balance of the purchase price will be funded through a promissory note and cash-on-hand.

The transaction, which is expected to be 11 to 13 cents accretive to earnings in the first 12 months (assuming that $30 million of World Fuel Services common stock is issued to pay the purchase price), is subject to customary closing conditions and is expected to be completed within the next 60 days.

The deal is another in a series of such deals. Over the last few years, World Fuel Services has acquired the assets of several large distributorsLakeside Oil, TGS Petroleum and Texor Petroleum. (Click here for previous CSP Daily News coverage of World Fuel Services.)

"We are very pleased to welcome the Western team to World Fuel," said Michael J. Kasbar, president and chief operating officer of World Fuel Services. "The acquisition of Western is another significant step in the continued evolution of our land-based fuel business, and their branded aviation fuel distribution business will further expand the breadth of our general aviation business."

Richard S. Neville, president of Western Petroleum, said, "We are excited to be joining forces with World Fuel and look forward to capitalizing on the many growth opportunities in the marketplace. Our market knowledge combined with World Fuel's size and scale will allow us to further expand our value proposition to a broader base of customers and suppliers."

Headquartered in Miami, World Fuel Services is a global leader in the marketing and sale of marine, aviation and land fuel products, as well as related services. World Fuel Services sells fuel and delivers services to its clients at more than 6,000 locations in 200 countries, including airports, seaports, tanker truck loading terminals and other customer storage locations. With 44 strategically located global offices, World Fuel Services offers its clients a value-added outsource service for the supply, quality control, logistical support and price risk management of marine, aviation and land fuel.

Land customers include petroleum distributors, retail petroleum operators and industrial, commercial and government accounts.

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