Mergers & Acquisitions

Tri Star Energy to Acquire Hollingsworth Oil Retail Fuel Assets

FTC requiring divestitures in two markets to avoid antitrust violation
Tri Star Energy

NASHVILLE — Tri Star Energy LLC can proceed with its proposed acquisition of certain retail fuel outlets and other assets from Hollingsworth Oil Co. after a ruling by the U.S. Federal Trade Commission (FTC) that requires Tri Star to divest an undisclosed number of outlets. The FTC determined that the deal would violate federal antitrust law, and Tri Star Energy, Hollingsworth Oil, C & H Properties and Ronald L. Hollingsworth have agreed to divest the assets, according to agency documents.

Tri Star entered into an agreement to acquire the outlets from Hollingsworth Oil on March 6, 2020.

"There are 53 Sudden Service retail stores we will acquire, and we must divest of two sites," Dawn Boulanger, vice president of marketing for Tri Star Energy, told CSP Daily News. "One is a retail site in Whites Creek and the other is a dealer site in Greenbrier."

The acquisition would expand Tri Star’s presence in middle Tennessee.

“Hollingsworth Oil is a well-established company whose core values align nicely with ours. They have great locations, many in areas where we do not currently operate,” said Steve Hostetter, CEO of Tri Star Energy. “Our combined companies will have over 140 retail outlets and 450 dealers featuring some of the best programs and operators in our region. The Sudden Service brand is well-known in the areas in which it operates, allowing us to continue to grow and build that brand in the future.”

Raymond James & Associates Inc., St. Petersburg, Fla., served as investment banking adviser to the seller. The companies did not disclose the purchase price for the acquisition or the terms of the agreement.

  • Tri Star is No. 76 on CSP’s2020 Top 202 ranking of c-store chains by number of retail outlets. Hollingsworth Oil is No. 116.

Tri Star, based in Nashville, owns and operates retail convenience stores, premium coffee shops, commercial fuel programs, and wholesale fuel operations in Tennessee, Kentucky, Georgia, North Carolina, Florida and Alabama. It operates 89 c-stores with fuel, including 82 in Tennessee under the Twice Daily, Hightail and t-Fuel names, and it sells fuel under a variety of third-party branded and unbranded banners. Tri Star also supplies fuel to a network of 285 dealer locations. The company also owns premium coffee brand White Bison Coffee, which includes locations throughout Middle Tennessee and Northern Alabama.

Hollingsworth controls Hollingsworth Oil and C & H Properties, both based in Springfield, Tenn. Hollingsworth Oil has a network of 54 c-stores under the Sudden Service name with attached retail fuel outlets in middle Tennessee. It provides a variety of third-party branded and unbranded fuels at its Sudden Service outlets and to 172 wholesale fuel locations.

The FTC’s complaint said that the proposed acquisition would harm competition for both retail gasoline and retail diesel in the two local markets of Whites Creek, Tenn., and Greenbrier, Tenn. In each of these markets, the acquisition would result in a merger to monopoly, the agency said. The complaint alleged that, without the remedy, the acquisition would substantially lessen competition for the retail sale of gasoline and diesel in Whites Creek and in Greenbrier. The acquisition would increase the likelihood that Tri Star could unilaterally raise prices in each of the two markets. Without the acquisition, Tri Star and Hollingsworth would continue to compete head to head in these local markets.

“Entry into each relevant market would not be timely, likely or sufficient to deter or counteract the anticompetitive effects arising from the acquisition,” the FTC said. “Significant entry barriers include the availability of attractive real estate, the time and cost associated with constructing a new retail fuel outlet and the time associated with obtaining necessary permits and approvals.”

Under the terms of the proposed consent order, Tri Star will divest undisclosed retail fuel assets in Whites Creek and Greenbrier to Cox Oil Co. Inc., Union, Tenn., within 10 days after Tri Star completes the acquisition. Cox Oil operates 40 Little General c-stores in Tennessee. Tri Star and Hollingsworth will maintain the competitiveness of the divestiture assets during the divestiture process, said the FTC.

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