In a deal valued at more than $60 million, ChevronTexaco has agreed to sell its Salt Lake-area fuel stations, plus contracts to sell fuel to Chevron's independent station owners, to Provo-based Mike Peterson Oil Co.
ChevronTexaco spokesman Dan Johnson confirmed a deal had been struck for the 12 remaining company-operated stores, plus more than 40 supply contracts for Chevron's independently owned stores.
Financial terms of the deal were not disclosed, but sources told the Oil Price Information Service it could be worth as much as $62 million, according to a May OPIS publication.
Peterson Oil Co. currently operates seven stores in Utah County, under the Extra Mart brand, and supplies fuel to 28 other retailers. Annual sales exceed $80 million.
The deal is expected to close Sept. 1 for the supply contracts and Sept. 30 for the company-owned stores, according to Peterson Oil president Mike Peterson. Assuming everything closes as planned, Peterson estimates sales could top $300 million.
"It's a big deal for us," he said. "It's something that only comes around once in a lifetime. The timing was perfect. If it had happened five years ago, we might not have been big enough to pull it off. If it had happened a year ago, ChevronTexaco might have decided to break it up into smaller chunks. This was perfect."
Peterson said the independently owned stores will continue to fly the ChevronTexaco colors, while the Chevron stations will operate under Peterson's Extra Mart label.
ChevronTexaco announced in May it was getting out of the direct supply business, according to OPIS writer Mary Welge. At the time, Welge reported that Peterson Oil was among a handful of candidates poised to snap up the stations and contracts.
"Through a bid process and because Chevron liked the way we do business, (they) decided to sell to us," Peterson said. "For us it made sense, because of our market share in Utah County. It made sense to move into the Salt Lake market."
Johnson said the deal made sense to ChevronTexaco, too.
"I think it's a good thing for consumers in Utah that buy our petroleum products," he said. "It allows us to be more cost-efficient and cost-effective, which ultimately benefits them."
Chevron sources state that while the company is moving to increase efficiency, which means selling off some of its low-cost businesses, it has no plans to sell the company's Salt Lake refinery or decrease its presence in the Utah market.
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