The four are Mid-Town Petroleum Inc. (Bridgeview, Ill.), Oil Distributing Co. (Cincinnati, Ohio), The Hurt Co. Inc. (Houston) and Pumpelly Oil Co. (Suphur, La.).
They all believed in what we were trying to do, RelaDyne CEO Larry Stoddard told Lube Report. And they believed that individually they couldnt do what could be done collectively. Each of these companies, although very successful in their own right, probably didnt have the resources or horsepower to be what RelaDyne really will be over the next few years.
The initial RelaDyne sales, distribution and services territory is the central corridor of the United States. RelaDyne operates 12 distribution centers in eight states within the corridor throughout the Midwest and Gulf Coast regions, and expects to deliver more than 16 million gallons of lubricants in 2010.
Jay Hurt, executive vice president for RelaDynes Field Reliablity Management group, said its services for the industrial and commercial markets include contamination control, assessing storage and use of lubricants, flushing and filtering lubricants for extended life, plant turnarounds, oiler outsourcing, as well as designing and implementing lubrication programs.
According to RelaDyne, Mid-Town Petroleums strength is in industrial sales and marketing, as well as manufacturing of custom-blended specialty lubricants. The Hurt Co. has built expertise in field reliability management services. Distributor Oil Distributing Co. brings nearly three decades of sales and marketing experience in the automotive industry. Pumpelly Oil has expertise in the commercial market and is a leading seller of diesel exhaust fluid. The owners of each of the four founding businesses are assuming leadership roles at RelaDyne suited to their skills and experience, the new company stated.
The theory and strategy behind this was developed a while back by a private equity group called Kidd and Co. They studied the industry and looked for needs not being met by current distribution infrastructure, Stoddard said.
They focused on a swath of the United States from the upper Midwest down to Texas in the center of the country. Then they looked for different companies in that particular geography that had different capabilities, so when you put it together, you have a very comprehensive group, Stoddard added.
He explained that AEA Investors owns about 80 percent of the RelaDyne organization. The management team, which includes the principals of the four founding companies in different roles, owns 20 percent. So we formed a new company thats fully funded, fully structured for growth and development within the space, Stoddard noted.
He said the individual companies will continue to answer phones with familiar company names, and handle business as they have. Really the two constituents you want to protect the most when this kind of event occurs, is you want to protect the employee associates, and protect customers, Stoddard said. So from our standpoint, with any customer-facing activities, there will be very little or no change. We need to make sure customers are comfortable with what theyve been doing and what theyll be doing in the future.
Jeff Hart, executive vice president of business development, added that the RelaDyne management team and its sponsors are committed to growing the company through a variety of initiatives, including exploring acquisitions.