Ferrellgas acquires two Blue Rhino barbecue tank distributors

Ferrellgas Partners acquired Salathe Gas Co. of Harvey, Louisiana, and North Star Exchange Inc. of Walton, Indiana. Both companies are third-party distributors for Ferrellgas’ Blue Rhino barbecue tank exchange division. Terms of the deal were not disclosed.

Utilizing cylinders produced at Ferrellgas’ Livingston, Texas, facility, Salathe Gas services the state of Louisiana and the southern half of Mississippi from its multiple offices located in both states. North Star Exchange has a production facility in Walton, Indiana, along with six propane tank staging areas in Indiana and Ohio, from which the company services customers in Indiana, Ohio and Kentucky.

The acquisitions are an additional step the company is taking to maximize earnings before interest, tax, depreciation and amortization (EBITDA) in the propane tank exchange business by internalizing and eliminating commission payments made to certain Blue Rhino independent distributors, Ferrellgas explains.

“We are pleased to welcome Salathe Gas and North Star Exchange and their employees to the Ferrellgas family,” says Jim Ferrell, Ferrellgas president and interim CEO. “These transactions are an important part of our ongoing strategy to further maximize profitability in this growing piece of the business by purchasing former Blue Rhino independent distributors we deem strategic to our tank exchange operations.”