United Fuel & Energy Corp. on March 1 announced it will acquire the assets of Reamax Oil Co., a lubricants and fuel distributor based in Camp Verde, Ariz., for an undisclosed amount, opening a newgeographic market for the Texas-based distributor.
United Fuel is a distributor of lubricant, gasoline, diesel and propane products to customers in the rural markets of Texas, New Mexico and Oklahoma. It sells wholesale lubricants and fuel to commercial customers. The company has 20 branch locations, 105 card-lock (unattended) fuel sites and 285 full-time employees.
Chuck McArthur, United Fuels president and chief executive officer, told Lube Report that Reamax distributes lubricant products, primarily industrial lubricants, with a little bit of automotive. Reamax also distributes gasoline and diesel products.
According to McArthur, the acquisition – including one bulk plant and five card-lock sites – provides a first-rate entrance into the Arizona market for United Fuel, which is expanding its footprint into new geographic areas.
Central Arizona has proven to be a highly profitable market for Reamax Oil, which has been serving the region for the last 17 years under the leadership of Wayne Monasmith, who has 26 years of experience in this industry, McArthur said. He has done an excellent job of cultivating a diverse and loyal client base of commercial, agricultural and mining companies, as well as individual accounts. He added that Monasmith will join United Fuel to help grow the business in Arizona.
United Fuel, headquartered in Midland, Texas, expects to fund the acquisition with a combination of cash, United Fuel and Energy common stock and seller financing. Closing of the transaction is expected in April. According to Reamaxs unaudited financial statements, it recorded $39.8 million in total revenue for the 12 months ending Dec. 31, 2006.