Alliance Petroleum Inc. has agreed to be acquired by a Canadian oil and gas industry service provider that sees significant growth opportunity in the Chicago-area lubricant blender.
Alliance, of Bedford Park, Ill., has signed a letter of intent to have all of its common stock bought by Prelude Ventures Inc., of Calgary, Alberta. Prelude, through its Pascal division, is principally engaged in providing infrastructure services such as seismic testing and well tie-ins to the oil and natural gas industry.
Prelude is in the process of remaking itself, though. In addition to Alliance, it is also in the process of acquiring another Chicago-area business, Tri State Stores Inc., owner of 14 Parts Plus auto parts stores. Together Alliance and Tri State earn several times as much revenue as the U.S. $8.75 million that Prelude recorded in 2002. Prelude plans to move to Chicago after completing the acquisitions.
Alliance claims it has capacity to blend and package approximately $80 million worth of lubes per year but is currently operating at half that capacity.
We think Alliance is poised for explosive growth, Prelude President and Chief Executive Officer Anthony Sarvucci said. We also think it will be a nice fit as a producer of products used by some of our existing customers in the oil and gas industry.
Alliances plant consists of four buildings totaling 90,000 square feet. It says it has served as a contract blender and packager for several large oil companies.
Tri State, in addition to the Parts Plus stores, owns a 45 percent stake in Motor Parts Warehouse, a wholesale distributor of auto parts to 3,000 stores across the United States. Tri State also plans to execute its right to buy the other 55 percent interest in the distributorship.