WTG Fuels Holdings LLC (“WTG Fuels” or the “Company”), was a large, diversified fuels distributor and convenience retailer with operations across west Texas and southeast New Mexico. The Company is a subsidiary of West Texas Gas, Inc., a large natural gas gathering/processing, transmission, and distribution company, which is majority owned by Stonepeak Infrastructure Partners (“Stonepeak”).
Prior to the sale, the Company’s assets included a chain of 24 high-volume convenience stores operating under its proprietary Uncle’s brand, a large fleet fueling business under its proprietary Gascard brand with 68 cardlocks, and a delivered fuels business providing propane, refined products, and lubricants to a diverse customer base of ~18,000 residential and commercial accounts through a network of over 70 bulk plants. Stonepeak decided to divest the entire WTG Fuels enterprise as it was non-core to the much larger natural gas business.
Matrix was engaged to customize and execute a carveout sale process that would allow the Company’s shareholders to realize maximum value for the divested assets. Matrix provided merger and acquisition advisory services, which included valuation advisory, marketing of the business through a confidential, structured sale process, and negotiation of the transaction.
Matrix valued each segment of the business separately based on division-level economics and the pool of potential buyers that would likely compete for the assets of each division as well as the entire enterprise. The sale process included regional and national convenience store & cardlock operators, petroleum marketers, propane & refined fuels distributors, as well as private equity groups seeking an industry platform.
Matrix executed a bifurcated sale process to solicit offers for the entire company and for each operating division.
Multiple competitive offers were received, and it was determined that maximum value for the assets could be achieved by selling the assets in two groups: (i) c-stores and fleet fueling; and (ii) the delivered fuels business. The first transaction occurred in June 2023, whereby the Uncle’s stores and Gascard business were sold to GPM Investments, a wholly owned subsidiary of ARKO Corp (Nasdaq: ARKO).
After divesting the Uncle’s and Gascard businesses, Matrix was able to market a more streamlined delivered fuels business to a select group of strategic and financial buyers. After receiving multiple competitive offers, ThompsonGas, LLC, a portfolio company of Redwood Capital Investments, LLC, was selected as the acquirer. The transaction with ThompsonGas closed in September 2024.
Matrix assisted in the negotiation and closing of the two separate transactions, including the purchase agreements and other transaction documents we well as the buyer due diligence processes.
The bifurcated transaction process resulted in higher total proceeds for the Company’s assets than were available by selling all of the Company’s assets to a single buyer.