RelaDyne closed on the acquisitions of Jack Backer Distributors Inc., Seaboard Neumann and Flamingo Oil – three of Floridas top lubricant distributors – marking its entrance into the Sunshine State, the company announced Monday. Financial terms of the agreements were not disclosed.
The Southeast has been an area weve been active in as we try to build a national platform [in the United States]. Weve been trying to find the right entry into Florida, and these companies seemed to be the best options, said Jeff Hart, RelaDynes chief strategy officer who also leads the company’s mergers and acquisition activities.
The Cincinnati, Ohio-based supplier currently has customers in Florida, but is serving them through a third party. This acquisition, Hart said, will allow RelaDyne to not only serve those customers directly, but expand their offerings in the state to include more automotive and industrial products and greater industrial reliability services.
Jack Becker Distributors is a multi-branded lubricant distributor operating throughout Florida and southern Georgia. The Jacksonville-based company focuses on finished lubricants, automotive products and diesel exhaust fluid. Miami-based Flamingo Oil distributes bulk and packaged engine oils in addition to shop equipment solutions and services.
Seaboard Neumann, which was formed by both Jack Becker Distributors and Flamingo Oil, offers customers a comprehensive line of finished lubricants, automotive chemicals and diesel exhaust fluid.
Weve had a relationship with these companies for over 20 years, and ultimately the companies decided to sell together. Theyre feeling pressure from customers and the market and are selling to create more opportunities, said Hart.
All three of the companies will continue to operate under their own names, with the addition of a RelaDyne company tagline. David Rowland will continue on as president of both Seaboard Neumann and Jack Becker Distributors, and Dale Mosley Jr. will run the former Flamingo Oil business.
Hart noted that the company will look for additional acquisitions in the area, as well as the 21 states where RelaDyne does not have an acquired company. Were focused on the U.S. market, but were looking at Canada as well, he said in an interview.
The company is looking to create a national distribution network, which has the potential to shake up the market, according to Petroleum Trends International President Tom Glenn.
I dont think its necessarily a game changer, but it has the potential to be very disruptive in terms of existing relationships. At the same time, it has the potential to be advantageous to national companies, he told Lube Report.
Typically, a major oil company has dozens of distributors across different regions with which they must coordinate when launching a new product or securing a new contract. But if the companys distributor has a national footprint, the oil major would be dealing with significantly fewer points of contact.
The burden of managing that national account is shifted to the distributor, so then RelaDyne is coordinating with all of its locations, explained Glenn.
Its a win for RelaDyne because they can potentially secure national accounts, versus what they do now, which is regional, Glenn added.