Miller Oil Co. Expands into Richmond Market through Acquisition

Strategic Insights -

Miller Oil Co., the largest gasoline retailer in southeastern Virginia, has made a significant expansion into the Richmond market with the acquisition of a chain of 12 combination gas station/convenience stores in the area. The Breez' In chain, based in Chester, had a major presence in markets where Miller Oil had hoped to expand, said Augustus C. "Gus" Miller, president and CEO of the Norfolk-based company. The acquisition, which also includes three Breez' In combination stores in Virginia Beach, is expected to bring $27 million of annual revenue to Miller Oil.

Key Takeaways:

  • Miller Oil Co. has acquired a chain of 12 combination gas station/convenience stores in the Richmond area, making it a significant player in the market.
  • The acquisition also includes three Breez' In combination stores in Virginia Beach and two more stores under development in the Richmond suburbs.
  • The price of the acquisition was "in excess of $5 million".
  • The transaction will bring $27 million of annual revenue to Miller Oil, which had $80 million of sales from gasoline and $25 million of convenience-store sales in its current fiscal year.
  • Miller Oil has also acquired 18 gas stations in Hampton Roads from Shell Oil Co.
  • The company will spend a week in early November analyzing each of its stations and deciding which brands to use at particular stations.
  • Miller Oil now operates a total of 96 stations, including the newly acquired 33.
  • The acquisition is part of a larger trend of consolidation among the nation's gasoline refiners and retailers, with major companies like British Petroleum Co. and Shell seeking to concentrate their operations.
  • Miller Oil will use the marketing, real estate, and financial support of Shell to open additional stations and boost sales of Shell's gasoline in the region.

Statistics:

  • The price of the acquisition was approximately $5 million.
  • The acquisition will bring $27 million of annual revenue to Miller Oil.
  • Miller Oil had $80 million of sales from gasoline and $25 million of convenience-store sales in its current fiscal year.
  • The company operates a total of 96 stations, including the newly acquired 33.
  • Over the past 10 years, the proportion of major oil companies' business done through distributors has increased from 25% to 60%.

Sources:

  • The Virginian-Pilot, lawrence jackson, "Miller Oil Makes Larger Push into Richmond Area", October 7, 1997.