Titan's Giant Growth Plans

Folding in Crescent Oil stimulates wholesale, renewable fuels ambitions

Steve Dwyer, CSP Reporter

RICHARDSON, Texas -- Since its inception in 2007, Titan Global Energy Group established a goal, formulated by its parent Titan Global Holdings Inc., to construct a vertically integrated company that underscored both retail and wholesale expansion efforts. The underlying element of the plan was to cultivate a platform for renewable fuels distribution and marketing.

The Richardson, Texas-based corporation inched a bit closer to that end when it announced Monday—as reported in a CSP Daily News Flash—that it was acquiring all outstanding common and preferred stock of Crescent [image-nocss] Fuels Inc., a privately held petroleum distribution company based in Independence, Kansas. Terms of the stock purchase were not disclosed.

With a long-time affinity for wholesale distribution of motor fuels, Crescent Fuels distributes to more than 340 locations in Kansas, Oklahoma, Arkansas, Missouri, Illinois and Louisiana, through its subsidiary Crescent Oil. Additionally Crescent, through subsidiary Crescent Stores Corp., operates 24 retail store locations in Kansas, Oklahoma, Arkansas, Missouri and Louisiana.

Now, Titan Global is able to bundle Crescent's sweet spot with the retail prowess of Blountville, Tenn.-based Appalachian Oil Co., which Titan had acquired in September 2007. Appco operates 58 retail units in Tennessee, Kentucky and Virginia and also possesses 170 dealer accounts. The company generated $418 million in revenues and distributed 130 million gallons of petroleum for its fiscal year ending August 31.

When the integration of Crescent Oil is complete, Titan Global Energy will have 510 retail locations in the fold, including 82 direct-op locations. Total motor fuels sales will amass about 500 million gallons per year.

"The addition of Crescent, its management team and its points of distribution add significant scale to penetrate our existing and acquired markets with renewable sources of energy," said Bryan Chance, president and CEO of Titan Global Holdings. "Crescent's broad petroleum distribution expertise coupled with Appco's retail operational strength will contribute to improved performance at both owned operations."

Chance told CSP Daily News that Titan's second acquisition in as many years is a harbinger of things to come for the Titan Global Energy, which was formed to ramp up production and distribution of environmentally friendly and sustainable sources of renewable fuels. This effort will be seen, initially, through the expansion of ethanol-based fuels—namely E85 and then evolve into expansion of biodiesel fuels, said Chance.

Chance said both Appco and Crescent have the existing competencies in place to drive the renewable fuels expansion effort.

Appco, which owns and operates 58 locations in Tennessee, Kentucky and Virginia, has been the recipient of grant funding from the state of Tennessee within the state's Green Island grant program, which is doled out to oil companies that develop a solid infrastructure for the distribution and marketing of ethanol—chiefly E85, said Chance. The same applies to Crescent Fuels, which—through its president and CEO Phil Near—has "taken a leadership role in the distribution of renewable fuels," said Chance.

Once Appco was integrated within Titan Global Energy last year, the holding company went scouting for a Midwest-based company with both a strong grasp of wholesale fuel distribution and a fluency in renewable fuels. Chance said that "as we visited with Phil and his team we were impressed with the same passion and commitment they had towards renewable fuels expansion. Phil has some creative ideas that can be put in place in short order."

Near told CSP Daily News that being integrated within Titan Global Energy will help Crescent Oil to more expeditiously grow its renewable fuels expansion efforts—not to mention greatly enhance its wholesale distribution business in general. "Being part of Titan Global Energy signifies that a tremendous management team is in place with a solid element of synergy along with it" from both retail and wholesale sides of the business, said Near.

Chance said the time frame to finalize the Crescent deal took about four months. From a synergy standpoint, Chance said Titan was captivated by the balance it could achieve—through Appco with its direct-owned retail capabilities and Crescent's wholesale distribution arm. It doesn't hurt either that Crescent owns a handful of stations, he said. "They'll feed off each one's of these strengths," said Chance.

He said there will be additional growth in the near term for the Texas corporation. Within the markets that Crescent operates in, Titan can now look to target some prime locations for acquisition—perhaps retail units that are part of Crescent's distribution network. "We want to add presence in key metro markets that Crescent serves," he said.

Crescent distributed 282 million gallons of petroleum and generated revenues of $687 million in 2007. Additionally, it distributed 215 million gallons of petroleum and generated revenues of $693 million for the nine months ending September 30.