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CHARLOTTE, N.C. -- NewGen Technologies, Inc., manufacturer and distributor of premium biofuels and hydrocarbon blends, signed agreements to acquire Appalachian Oil Co. (APPCO), a wholesale and retail distributor of petroleum products in the Southeast, which saw more than $400 million in revenue during fiscal 2006.
The acquisition fuels NewGen's mission to be a leader in the global, fully-integrated manufacturer and distributor of premium biofuels, by positioning its subsidiary, ReFuel America, to distribute biofuels to more than 200 locations across six states, the company stated. Purchase price was not disclosed.
"NewGen is delighted with this acquisition as there is a tight synergistic fit, including strong management, reflecting a solid value for our shareholders and providing ReFuel America with much greater scale for fuel distribution. Our previous terminal acquisitions began to achieve these goals, and the APPCO acquisition will greatly advance these objectives," said Bruce Wunner, NewGen's vice-chairman and CEO. "As we continue to implement our Fields to Wheels mission, we are looking to explore similar strategic opportunities as they become available."
Appalachian Oil Co. supplies Exxon, BP, Marathon, Sunoco, CITGO and its proprietary APPCO-braded fuels to retail and wholesale customers in Tennessee, Kentucky, Virginia, West Virginia, North Carolina and South Carolina. The company also operated 58 company-owned convenience stores and supplies fuel to more than 160 other individual dealers, the company stated.
"APPCO's management team has been very successful and will continue working with us to build the APPCO and ReFuel America division. We will exploit opportunities to use the enhanced fuel performance expertise of NewGen to expand product lines and revenue through APPCO's established distribution channels," said Michael F. D'Onofrio, NewGen's newly promoted chief operating officer. "We are very excited by these developments and are looking forward to completing the integration of our teams and distribution strategies with biofuels -- which are in high demand."
Appalachian Oil Co. buys petroleum fuels directly from refiners, and blends them with ethanol that it purchases in bulk from regional manufacturers.
The acquisition is subject to customary closing conditions and is expected to be completed in the first quarter of 2007. BioFuel Investments LLC agreed to provide $70 million in secured debt financing to NewGen for the transaction, to pay off existing debt and meet strategic objectives. The money would cover a 10-year term and BioFuel Investments has the option to purchase five million NewGen shares at $2 each.
In other NewGen news, the company promoted Michael F. D'Onofrio to the position chief operating officer, from his role of senior vice president. D'Onofrio is a founder of NewGen and its subsidiary, ReFuel America.
"We are delighted that Michael has accepted this promotion to chief operating officer and can become more involved with our growing domestic and international businesses," said Bruce Wunner, NewGen's vice chairman and CEO. "A strong and experienced senior management team is essential as we continue to implement our organic and strategic growth strategies."
NewGen also appointed James Peeples to the position of senior vice president of business development and government relations. He comes to the company from Milford, Ohio-based AHL-TECH, LLC, where he served as its vice president. Peeples also assisted in the creation of the National Biodiesel Board, a U.S. biodiesel industry trade association, and served as a senior executive for Information Resources, Inc.
"Jim has a vast network of successful professional contacts across government, agencies, and the private sector from agriculture to petroleum product refining," said Wunner. "He also brings NewGen hands-on biofuel project management experience with outstanding skills in recruiting, organizing and managing staff and consultants to meet project objectives on time and under budget."