4 propane retailers explain the acquisition process, reasons for selling

LP Gas published a comprehensive list of acquisitions completed over the past year here. 

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Whenever propane retailers sell their businesses, they typically have a variety of reasons for doing so, from retirement and the pursuit of new interests, to receiving requests from their children (who would have otherwise owned the businesses) and, in recent months, COVID-19.

LP Gas spoke to four propane retailers, who each sold their businesses since the beginning of 2020, to learn the ins and outs of the acquisition process, including the ways in which buyers are chosen, the responses of employees, propane retailers’ lives afterward and exactly how their former businesses may change after the sales are completed.

Advantage Propane: A 10-year plan to sell

In 2012, Douglas Tascarella and Steve Congiusta created Advantage Propane from the ground up – a true startup.

As they developed the Califon, New Jersey-based company, they had one specific goal in mind: to sell it in 10 years, as Congiusta knew he would want to retire by then.

However, they achieved their goals a bit sooner than they originally envisioned, as they were able to sell the company in eight years instead. Growth was exceptional. In fact, the company was growing to the point that it was maxing out its capabilities.

This significant growth was due in part to Tascarella’s and Congiusta’s partnership, which Tascarella describes as “perfect.”

“Steve oversaw the inside operations, and I oversaw the outside operations,” Tascarella says. “It simply wasn’t realistic to find a similar partner.”

While the partners prepared to sell, they were very selective as they began to receive offers from various companies. First, they were interested in selling Advantage Propane to a company that was family-owned. And, second, they wanted the buyer to continue the traditions they had implemented during the past eight years. In the end, they were focused on the legacy of the purchaser rather than just the price.

For the past five years, Christina Armentano, executive vice president of Paraco Gas, shared an interest in purchasing Advantage Propane, as she spoke to the company’s outside broker, Cetane Associates. She was also dedicated to the family aspect of her business, which caught Tascarella’s and Congiusta’s attention. So, after years of discussions, Advantage Propane and Paraco Gas began the acquisition process in August 2020 and finalized it in December of that year. Neither partner discussed the acquisition with employees until it was completed.

“Some were shocked, as they had been with us since day one. They kind of knew what our long-term goal was, though,” Tascarella says. “Others knew it was the right time.”

Since the acquisition was finalized, Congiusta has retired, while Tascarella still oversees the day-to-day operations of Advantage Propane as the area manager, a role he intends to continue for some time. Additionally, he’d like to become involved with the corporate structure of Paraco Gas and pass on the best practices that made Advantage Propane so successful.

“Paraco has exceeded our expectations so far, and they’ve done a very good job of maintaining the Advantage Propane name,” Tascarella explains. “The first three months of the acquisition were record months for Advantage Propane, in fact.”

Holden Oil: Selling a family business

Holden Oil first began as a gas station, as part of a family farm, in 1924. In the 1930s, the Holden family became involved with the oil business, and, 30 years later, it began to focus on the propane industry.

Although the gas station and a convenience store are still owned by the family, Chuck Holden and his son, Tom, decided to sell the oil and propane business in 2019, a decision that was accelerated by the COVID-19 pandemic. After all, Chuck was always motivated by the personal interaction of the business, which decreased substantially due to the virus.

With Gray, Gray & Gray’s merger and acquisition service, FuelExchange, as a broker, Holden Oil fielded offers from a variety of companies. Holden primarily was interested in selling his family-owned business to a company that would take great care of his employees, whom he views as family, too.

“It was extremely emotional and very challenging to sell Holden Oil, as the propane and oil industries have been part of my entire life,” Holden stresses. “I needed to be confident I was making the correct decision.”

Of all the companies that contacted the Peabody, Massachusetts-based oil and propane business, one stood out: Superior Plus Propane. Holden felt the company would treat his employees the same way he had. With that in mind, Holden signed a letter of intent in November 2020 and completed the sale in January 2021.

After the purchase and sale agreement was signed, Holden messaged his staff, most of whom were working remotely, and asked them to join a teleconference.

“Drivers pulled over, techs stepped out of jobs and everyone received the news together,” Holden says. “Superior Plus Propane had a team come in that day and immediately began the transition of employee records and provided great support.”

Since selling Holden Oil, Holden and his son, Tom, continue to operate the family’s gas station and convenience store, and are also involved with various real estate projects and nonprofit organizations. Although Holden misses the propane industry, he believes he made the correct decision, as he’s confident that Superior Plus Propane will be successful. He also has nothing but fond memories of the propane industry.

“The amount of friends I have made and the support and encouragement I have received over the years – I simply don’t think you can find that in any other industry,” Holden explains. “I always felt that I could call or they could call me for anything, even if we were competing head-to-head.”

Palmetto Gas: Preparing for greatness

After the passing of Scott Rumph Jr. – the founder and majority stockholder of Sumter, South Carolina-based Palmetto Gas – in 2017, board members and company leaders, including CEO Andy Smith and minority owner Torey Filyaw, began to discuss the company’s future.

They decided to operate the business as usual, unless they were approached to sell and the opportunity seemed to be a great fit for employees and stockholders.

For Filyaw, who began working at Palmetto Gas in 1998 as a service technician and continued to advance within the company over the next two decades, a key factor for selling was to provide employees more benefits, along with a better future in the propane industry. Most employees had worked for Palmetto Gas for more than 15 years and enabled the company to achieve greatness, thereby deserving greatness in return.

“We made sure they knew we cared about them, and we wanted the best for them,” Filyaw says. “We would do our best to ensure they had a great future with whichever company we decided upon.”

In addition to benefits, including insurance packages and retirement programs, Filyaw was also interested in selling to a company that was focused on growing in the Sumter area. With this in mind, one organization stood out: Energy Distribution Partners (EDP).

During conversations with employees at EDP, Smith learned that the organization had purchased two companies in South Carolina and was interested in growing in the Sumter area, too.

Smith says upon speaking with companies that had been sold to EDP, their support of the organization, along with their acquisition processes as a whole, were overwhelmingly positive. Filyaw and Smith knew they found the organization for which they had been searching.

The acquisition process began quickly after the initial contact with EDP employees in November 2019, and the sale was finalized in January 2020.

Since completing the sale, Filyaw has maintained his association with EDP. He’s now an operations manager at Palmetto Gas, which is celebrating its 59th year in business. As he looks ahead to the future, he’s optimistic about the new ownership and the acquisition as a whole.

“I really have enjoyed working with all the staff members of EDP, and I feel this has been great for everyone involved,” he adds. “Palmetto Gas has all of the resources it needs to continue growing and become an even better propane company down the road.”

Pirkl Gas: An acquisition based on shared values

Twenty-six years ago, Greg and Ann Pirkl bought a 500,000-gallon, family-owned propane company near Owatonna, Minnesota, marking the beginning of Pirkl Gas. Twenty-five years beforehand, Greg’s father had purchased equipment and property from the Standard Oil Co., his employer for 11 years. In 1978, he hired Greg, who had just graduated from high school, to begin working at his business and ultimately sold to Greg and Ann in 1989.

When the Pirkls began to think about selling their business in 2019, they knew it would be an emotional decision.

“We loved the propane company we built and probably wouldn’t have even thought about selling if we were 20 years younger,” he says.

As the Pirkls began to search for a buyer, they knew they wanted to sell to an honest, independent and trustworthy company that shared Pirkl Gas’ values concerning customer and employee treatment. ThompsonGas, which had purchased Greg’s friend’s business within the past year, came to mind. That acquisition was successful, providing the Pirkls the confidence they needed.

After beginning negotiations with ThompsonGas in April 2020, the entire process was completed within six months. ThompsonGas finalized the deal at the Pirkls’ pace, enabling Greg to have a “soft landing.” He remains involved with the company part time, particularly during the busy corn drying and home heating seasons.

The Pirkls didn’t mention anything to their employees about the acquisition until Sept. 1, 2020, one day before the closing occurred.

“When we told them, they were very supportive of our decision,” he says. “It was rewarding to sell to a great company like ThompsonGas, who is taking care of our customers and employees. In fact, their wage and benefit package slightly exceeds ours.”

As Pirkl looks back at his nearly 30-year career in the propane industry, he remembers how well his customers treated him, along with the various challenges and dynamics he enjoyed about the industry. He would do it all over again.

“It never really seemed like work to me because you could see the instant rewards as the business grew,” he says. “Our hope is that our son and daughter-in-law, who also work for ThompsonGas now, along with our loyal employees, enjoy their careers as much as we did.”