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Gulf Oil to Be Acquired by Private Equity Roll-Up

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Gulf Oil to Be Acquired by Private Equity Roll-Up Gulf Oil has been sold. The buyer is ArcLight Capital Partners, which prior to this spring was a little- known but especially well-heeled Boston-based private equity firm with over $12 billion in investments. ArcLight burst onto the scene in February when it outbid Marathon Petroleum and several other publicly traded master limited partnerships and acquired Petroleum Products Corp. (OPIS 2/18/2015). ArcLight is not to be confused with New York-based Arc Logistics LP, a public company that operates crude and products terminals in various Great Lakes and Southeastern states as well as in New York Harbor, Louisiana and Mississippi. The two companies have no affiliation. ArcLight has been active in downstream petroleum before, however. The company at one point held a stake in the General Partner share of Buckeye, and helped launch public MLPs in natural gas, crude oil, shale and asphalt. The deal was announced to employees at Gulf's Framingham, Mass., headquarters this morning and has been in the works since October. The company's assets elicited very strong interest from refiners, private and public companies, and especially within the segment of master limited partnerships, which need to grow in order to sustain their business models. Sources say that the Sunoco LP, and its affiliate Energy Transfer Partners, was among the finalists and ambitious bids were also received from Marathon, Global, Noble and others. ArcLight will purchase the assets from the Haseotes family, which will in turn concentrate on expanding its Cumberland Farms' offering in the Northeast and elsewhere. The family had considered a sale or other options for the Gulf assets some seven years ago, but pulled the offering from the market when the economy slipped into recession. The ongoing sales process was managed by investment bank Evercore Partners. ArcLight's first goal may be to figure out a plan to integrate the Gulf assets with the terminals it acquired from Petroleum Products (PPC) in April. Gulf has seven terminals in Pennsylvania, and when the PPC properties are added to the holdings, ArcLight will operate 19 supply facilities in the state. New to ArcLight will be the branded business, which includes a network of over 2,500 sites in 30 states with hundreds of dealers and distributors. Gulf also owns a transportation fleet of nearly 200 trucks and has a significant network of unbranded fuel sales through proprietary and third-party terminals. Gulf also has a trading and blending operation and holds valuable legacy line space on Colonial Pipeline. So far, there is no word on what price might have been paid for the Gulf Oil assets. ArcLight never disclosed the purchase price for PPC, but estimates put the value at above $1 billion. Sources believe that the final price for Gulf may have been in the $1.1-billion-to-$1.3-billion range or higher.

Source: Oil Price Information Service

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