The transition of Chevron Hawaii Downstream Assets to One Rock Capital Partners
SoCal R&M led the transition of the Downstream Assets in One Rock Capital’s acquisition of Chevron’s refining and marking businesses in Hawaii. As the retail experts and consultant for One Rock on this major M&A project, SoCal R&M led every aspect of the retail due diligence and transition. The retail business is 75 million gallons per year in sales through 56 retail sites comprised of 6 COCO and 50 CORO/RORO facilities. While there was no requirement for the RORO facilities to contract with One Rock, all except for 3 dealer sites signed up for term supply business. Specific areas of responsibility include:
- Negotiation of Fuel Supply Agreements and Business Leases with Company Owned and Retailer Operated (CORO) and Retailer Owned and Operated (RORO) locations.
- Leading the development of the IES Franchise Disclosure Document (FDD)
- Managing the rollout of the PDI Back Office System at the 6 COCO locations
- Managing the rebranding project that consisted of converting 56 locations to the Texaco Brand
- Managing new dispenser installation and other construction projects at 24 locations
- Managing the rollout of the Point of Sale Systems to each of the COCO and CORO locations
- Developing the Retail price strategy and monitoring
- Providing competitor pricing activity analysis
- Providing individual site elasticity analysis
- Providing site consultation for branded dealers
The retail portion of this project closed on time and under budget. Retail operations for all sites were transitioned to One Rocks’ subsidiary company Island Energy Services (IES) within 24 hours of the close of the acquisition from Chevron.
Strategy and Network evaluation for a Publicly Traded US Refining Company
Contracted with a refining company that was seeking to expand vertical operations into the retail fuel and c-store businesses for strategy and potential asset acquisitions. Consulted on two separate M&A projects. Reviewed all data room information and provided feedback on the financials and projections. The analysis was supplemented with a pro forma reasonable expectation of overhead costs, forward capital, maintenance expense needs, direct operating costs, and environmental reviews which were not apparent in seller provided information. Gaps were identified in areas that would significantly affect value. Developed for a client a request list of all additional information needed from the seller to make a proper bid and perform detailed due diligence.
Strategy development for a global firm seeking entry into the POS/BOS and Cash Handling services for the Gas Station C-Store Industry
SoCal R&M provided the client with a detailed competitor analysis and supply chain interface mapping for development of entry and participation strategies for this market. A detailed study was conducted that included:
- Segmented customer base with company listings grouped via 50-250 sites, 250 to 500 sites and greater than 500 sites
- Competitors and their offerings
- Technology review and all site level hardware/software interface requirements
- Cash management technology availability
- Market segmentation by site ownership, operator, and supplier
- Strategic review of self-service check out options
- Industry technology spend and priorities
- Recommendations for Target customers and Markets, product and services differentiation opportunities, market entry and execution strategies
MSCO for BP Corporation
SoCal R&M through its affiliate company, PNW R&M is a multisite commissioned operator for the BP corporation in the Tacoma and Olympia markets in Washington state under a 5-year term contract. PNW R&M is responsible for the entire operation of 11 ARCO ampm sites and is growing with the client’s operations in company-owned and operated facilities.
- All personnel management including hiring, termination, payroll, workers compensation, training, bonus structures, and supervision
- Site operational execution according to ARCO ampm documented standards with a comprehensive review and scoring on a monthly basis
- Licenses and permit applications and management
- Product ordering and site merchandising according to ampm planograms
- Execution on behalf of a client for minor site maintenance and management of large contract maintenance execution by service providers
- Site management of Cash, Shrink, Voids, Inventory, customer complaints, alcohol and tobacco law compliance, food and general site safety
Antitrust Pricing Consultation for the USDOJ regarding practices of wholesale marketers in a specific market
Complete a thorough review of the pertinent regional Motor Fuel Competition, Supply, and Distribution networks for wholesale and retail fuels sector to determine why consumer pricing was significantly higher than prevailing markets in the outlying regions.
Through its SMC, LLC partner company, SoCal R&M contracted with the Departments of Justice and Licensing and Consumer Affairs. A 4-year trend in Motor Fuel Competition, Supply, and Distribution for the affected region was conducted for potential illegal pricing practices. A thorough and in-depth review was made of the following items:
- Retail networks and competition
- Wholesale networks and competition
- Transportation and distribution logistics/costs/competition
- Regional market performance vs. adjacent competitive markets
Recommendations, implementation, and ongoing support was provided to the government through the DOJ.
Pricing expert for the people in a class action gasoline price fixing legal action
SoCal R&M through its affiliate company, SMC, LLC provided technical expertise for a class action lawsuit brought against four integrated wholesale suppliers/retailers in a large geographic region.
As a designated expert for the plaintiffs, SMC reviewed contracts and supply agreements for hundreds of retail sites. The review included the terms, pricing formulas, and contract execution. Wholesaler marketing practices and regional pricing was also reviewed in detail.
- Reviewed and analyzed hundreds of relevant supply contracts from a group of integrated wholesale suppliers and retailers. Provided a detailed analysis of contract provisions that were not within normal industry practices and should be reviewed for a legal opinion.
- Made a preliminary review of the overall subject marketing area for value chain gasoline price markers for wholesale and retail to validate the case. Assisted the people’s legal team to fully understand the contractual relationship and various and complex business structures prevalent in the marketing of gasoline from the refinery to the consumer.
- Provided gasoline pricing expertise to the people’s legal team in the development of court documents supporting the case.
The management team for a Private Equity Bid on a $2 Billion regional Petroleum Refiner/Marketer
SoCal R&M assembled a Management Team backed by Apollo Capital in a bid for BP’s Carson, CA Refinery, and Southern California ARCO ampm retail network. This was a $2.4 Billion acquisition bid. The SoCal R&M team:
- Modeled the refinery and marketing economics and developed pro forma EBITDA for a range of margin scenarios
- Designed management structure.
- Developed potential cost savings of $132 MM per year of EBITDA
- Modeled financials with MLP structure for terminal and distribution assets
- Developed and submitted competitive bids throughout BP’s multiple staged bidding process.
- Developed a value creation plan whereby netting 800MM at closing by divesting the real estate and leasing back the COGEN and selling the Pipeline
While not awarded the sale, SoCal R&M was the cover bid for the ultimate purchaser of the Assets.
Expert witness for plaintiff severely burned while pumping gas
Provided expert testimony on behalf of a woman that received 3rd degree burns over 20% of her body due to a faulty fuel nozzle at a branded gas station. Expertise and testimony involved:
- The extensive review of the gasoline pump and nozzle mechanical operation
- Operational Standards of Care as established by the retail gasoline industry through API, NACS and Major Branded supplier procedures
- Thermodynamic review of gasoline heat and energy content. Work included ignition temperature, volatility and combustion studies
Expert witness/consultant in over a dozen slip and fall cases at Gas Pumps and inside C-Stores
SoCal R&M has been accepted in state and federal courts as an expert in the field of Gas Station and C-Store Operations and Operational Standards of Care. Each year thousands of people are injured at Gas Station C-Store facilities by slipping and falling due to fuel spills on the forecourt, wet c-store floors, and tripping hazards. Through its SMC, LLC affiliate, SoCal R&M has represented numerous clients both plaintiff and defendant in litigation regarding these accidents at the site.
In addition, to slip and fall injuries, SoCal R&M has provided expert witness and consultation services for injuries on site due to motor vehicle accidents, customer assaults, and substance abuse by site personnel.
Eminent domain expert for a local county in a Gas Station C-Store Taking
Provided expert witness testimony and consultation for condemnation cases at retail gasoline stations throughout the country.
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