SOUTHFIELD, Mich. -- In a move that would put a Midwest distributor on the road to vertical integration, Specialized Services Inc. (SSI) has entered into negotiations to buy 11 gasoline and convenience stores in the Southeast, according to a spokesperson.
The Southfield, Mich.-based company is developing a transportation and distribution network incorporating alternative fuels and pricing strategies to deliver on a low-cost business model, according to Kevin Gray, director of business development for GFS Investment, a New York firm consulting with SSI.[image-nocss]
This is the company's first purchase of convenience stores, Gray told CSP Daily News. The company is more into transportation and logistics, but this is part of a step-by-step process to deliver [product] at a lower cost.
The deal would also include real estate and other physical assets of five other stations, a 10,000-sq. ft. storage warehouse, a tanker truck and six wholesale distribution contracts. The company that SSI intends to buywhich Gray declined to namecurrently distributes to 16 locations, has contracts with multiple major refineries, petroleum sales in excess of $10 million gallons per year and total sales in excess of $12 million dollars per year.
The acquisition would launch SSI's efforts to expand its fuel business and begin the initial stages of what the company calls its eco-development system.
David Joseph, chairman, president and CEO of the 19-year-old company said in a statement, As we strengthen our product mix and focus on profitable, well-managed companies, we lay the foundation for increased shareholder value.
Gray of GFS said the deal is expected to close within a 60-day time frame. We're doing some due diligence and making sure certain contracts will stay in place, he said.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.