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COLUMBUS, Ind. -- Kiel Bros. Oil Co. Inc. signed an agreement with MarketplaceAdvisors LLC (MPA) to manage to the sale of its entire convenience store division.
MarketplaceAdvisors, based in Scottsdale, Ariz., will conduct a sealed-bid auction of the stores, which comprise 212 convenience stores and gas stations in northern and central Kentucky, southern and central Indiana, and southern Illinois, the release said
Columbus, Ind.-based Kiel Bros., a family-owned business founded in 1941, operates the stores primarily under the Tobacco Road name. Through branded-supply agreements, a majority of the stores sell the gasoline brands of BP and Marathon. However, to increase buying flexibility and encourage competition among the major oil companies, Kiel Bros. recently added unbranded locations.
The oil company is offering the real estate, stores and gasoline equipment on a lease basis to third-party operators. Also as part of the deal, Kiel Bros. is retaining all environmental liabilities associated with the sites, prior to and post closing.
"The decision to choose MarketplaceAdvisors had a lot to do with [MPA Managing Directors] Greg Landry and Bill Trefethen, and their understanding of the business and the different niches within the business," said Gregory Pence, Kiel Bros. President. "We were able to explore our options, rather than merely selling the stores.
"We think individual operators or large chains can probably get better economies of scale than we could as a regional convenience store chain."
MPA said the sealed-bid process would allow serious bidders of any size to acquire stores that fit into their market strategy.
"Our sale process markets assets in two distinct ways," Landry said. "First, we select those stores -- whether some or all -- that will be of most interest to strategic buyers, and we market those assets directly to those buyers. At the same time, we use a flexible sealed-bid auction of the assets -- primarily aimed at smaller entrepreneurial operators.
"This dual process gives sellers the security of knowing that their stores are being marketed to the widest population of potential buyers and that there is a competitive environment between strategic and smaller entrepreneurial buyers."
Pence said he hopes some of the company's employees or current dealers will have an interest in the locations. "Our goal is to get the word out to people who are either interested in starting their own business or wish to expand an existing one," he said.