Robust supply chains are integral to the movement of goods across industries and geographies. Current trends in distribution and logistics are driven by rapidly advancing technology, and the need for scale and efficiency drives M&A activity within the space. Corner Capital’s expertise enables clients to adapt to these evolving market dynamics and execute their strategic initiatives.
Logistics & Warehousing
Service Type: Financing & Capital Advisory Services
Client: Estepp Energy, LLC, Estepp Friendly Shell, Inc., and Estepp Land Paris, LLC (the three entities are collectively referred to as the “Company” or “Estepp & Affiliates”).
Client Description: Founded in 2012, the Company operates more than 10 locations, operates bulk plant facilities, leases numerous locations to branded dealer operators, and will distribute more than 80 million gallons of Shell, Marathon, Sunoco, BP, 76, and unbranded petroleum products to over 180 dealer and commercial customers throughout Central Kentucky.
- The Client had recently purchased the dealer fuel supply, bulk plant/commercial fuels, and retail operations of a local competitor (Cumberland Lake Shell), significantly increasing the size and scale of the Company’s operations.
- As part of this transaction, the Company negotiated purchase options on the underlying real estate for the store operations purchased in the Cumberland Lake Shell transaction. One of the main goals of this capital raise was to secure acquisition financing to exercise these purchase options.
- Additionally, Estepp’s growth trajectory had surpassed their local bank’s ability to provide flexible and attractively priced debt capital. In short, the Company’s rapid growth required a larger commercial banking relationship with an institution that understood their business, could loan on cash flows/total enterprise value, and offered quick, flexible access to capital via a development line.
- Corner Capital was tasked with sourcing, structuring, and negotiating the following debt facilities:
- Senior term debt to refinance substantially all of the Company’s existing debt, and finance the exercise of certain purchase options negotiated through Estepp’s acquisition of Cumberland Lake Shell.
- Revolving credit facility for working capital needs, secured by inventory and receivables.
- Development line of credit for new builds on existing properties, securing new real property for NTI builds, and smaller bolt-on acquisitions.
- As Estepp had recently undergone a transformative acquisition, and was in the process of implementing PDI, Corner Capital performed intensive underwriting and financial modeling (using several legacy sources) to present the Company’s financials and cash flows on a consolidated basis.
- Corner Capital analyzed collateral/cash flow from all the Company’s business segments to develop and propose a financing solution that accomplished Estepp’s goals.
- Corner Capital successfully marketed and executed the proposed financing solution, presenting the Client with multiple competitive proposals, increased financing flexibility, and a new banking relationship with a large institutional lender.
- Estepp was able to refinance its existing debt, finance the exercise of certain purchase options negotiated through the acquisition of Cumberland Lake Shell, secure a revolving credit line for working capital needs, and negotiate a development line of credit to support future growth.
- The Company closed on this transformative debt capital raise on December 13th, 2022.
Service Type: Valuation Services, M&A
Client: Morgan Oil Company, Inc. (“Morgan Oil”, or the “Company”)
Client Description: Founded in 1935, Morgan Oil is a third-generation branded petroleum marketer, convenience retailer, and commercial fuels distributor headquartered in Nacogdoches, TX.
- The Client sought retirement from the industry after having grown the business organically over the course of 87 years.
- Corner Capital performed a Fair Market Valuation for Morgan Oil and outlined strategic options. The Company decided to pursue a structured sale process through Corner Capital.
- Corner Capital sourced proposals from each of the potential buyers that it engaged under a non-disclosure agreement and sharing of the marketing material in Corner Capital’s Confidential Information Memorandum & data room. Through two rounds of extensively negotiating the most competitive Letters of Intent, Majors Management, LLC was selected as the winning bidder to acquire Morgan Oil in Corner Capital’s structured sale of the Client’s business assets.
- Corner Capital worked closely with Morgan Oil from valuation, sourcing & negotiating LOIs, contractual negotiations, diligence, to closing.
- The Client’s operations and business assets were successfully marketed and sold to Majors Management, LLC, which closed on November 4, 2022.
Service Type: Valuation Services, M&A
Client: Royce Groff Oil Company d/b/a Valley Mart
Client Description: Founded in 1969, Royce Groff Oil Company d/b/a Valley Mart is a branded petroleum marketer and convenience retailer serving consumer and commercial customers in Medina County, Texas
- Client sought retirement from the industry after having grown the business organically over the course of over 50 years, but wanted to retain long-term cash flow from ownership of the real estate underlying the business assets.
- Corner Capital performed a Fair Market Valuation for Royce Groff Oil Company and outlined strategic options. The Company decided to pursue a structured sale process through Corner Capital.
- Corner Capital sourced proposals from each of the potential buyers that it engaged under a non-disclosure agreement and sharing of the marketing material in Corner Capital’s Information Memorandum and data room. Through two rounds of extensively negotiating the most competitive Letters of Intent, Texas Enterprises, Inc. Was selected as the winning bidder to acquire Royce Groff Oil Company in Corner Capital’s structured sale of the Client’s business assets.
- Corner Capital worked closely with Royce Groff Oil Company from valuation, sourcing and negotiating LOIs, contractual negotiations, diligence, to closing.
- The Client’s operations and business assets were successfully marketed and sold to Texas Enterprises, Inc., which closed April 1, 2022.
- Corner Capital structured Net Leases for the real estate properties underlying the convenience retail and bulk plant assets, providing long-term income for members of the Client’s family.