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GASTONIA, N.C. -- Once bustling with more than 100 locations and a vibrant jobber network, Acme Petroleum & Fuel Co. and Acme Properties Limited Partnership (APLP) auctioned off its remaining assets last week as ordered by the United States Bankruptcy Court.
The southeastern concern filed Chapter 11 last December. Since then, Acme had pared its store count from 73 to 33 and sliced its dealer network from 75 to approximately 14. The auction was conducted by Matrix Capital Markets Group Inc., a middle-market investment bank headquartered in Richmond, Va.
Tom Kelso, managing director at Matrix Capital, said the purchase price for the Acme and APLP assets was approximately $31 million. There were 14 total purchasers of the assets, with one buyer purchasing as many as 10 units and seven purchasers who bought one location each.
The closings of the sales are scheduled on or before Oct. 31, Kelso said, but are still conditioned on Bankruptcy court confirmation. A confirmation hearing is scheduled for Oct. 24.
Acme's downfall was largely due to its inability to turn a profit on fuel, according to company CEO and chairman Tally Roberts. "The reason we weren't able to make a profit is because the industry in the past two-and-a-half years has been the pits as far as margins are concerned," he told Convenience Store News in an earlier interview.
Looking to breathe life into its aged stores, Acme in 1998 received a $10-million revolving credit line from Fleet Capital, investing funds in capital upgrades at the fuel island and inside the store. But with new canopies, tanks and lighting came growing debt coupled with high interest rates.
Exacerbating matters, the state of South Carolina barred video poker in stores in 2001, hitting Acme with a $3-million blow to the bottom line, and the company had bought out the estate of Roberts's father, contributing to an overwhelming debt load.
"Did you ever have a car with a bad gas gauge?" Roberts asked rhetorically. "Well, that was my case. We figured out in October 2001 that we were in trouble. We stonewalled at first. We tried to get better and hired a turnaround group."
Acme sold off weaker units and closed a deal in the fall for its fleet fueling operation. But the chain's operational mindset was essentially unchanged. "Their idea of a turnaround was to cut a lot of expenses, which they did," said Tod Butler, Matrix Capital's vice president who has worked to restructure Acme. "But there wasn't an end game. There was no negotiation with lenders, with leases. There was no real strategy in place."
Acme contracted Matrix and entered into bankruptcy with a strategy. "We went through every unit and, in fact, we recommended that they even sell some profitable units because they were too far away and not part of a concentration," Butler said.
In the end, the mounting debt was too much to overcome.