World Fuel Services acquires Flyers Energy for USD775 million

A wholly owned subsidiary of World Fuel Services Corp. has signed a definitive agreement to acquire Flyers Energy Group from the Dwelle family, who have been engaged in the petroleum marketing industry for more than 40 years. The total purchase price for the acquisition will be approximately USD775 million.

Flyers Energy is headquartered in Auburn, California, U.S.A., with 475 employees. The company’s  2021 estimated revenue is USD2.4 billion. The company provides fleet fueling, fuel supply and lubricants distribution to more than 12,000 customers across the United States. Flyers’ leading national network of cardlock locations facilitates high volume and high frequency fueling to meet the needs of commercial fleets, 24 hours a day/365 days a year. 

World Fuel Services, headquartered in Miami, Florida, U.S.A., is a global energy management company involved in providing energy procurement advisory services, supply fulfillment and transaction and payment management solutions to commercial and industrial customers, principally in the aviation, marine and land transportation industries. World Fuel Services sells fuel and delivers services to its clients at more than 8,000 locations in more than 200 countries and territories worldwide. 

World Fuel Services said it will pay Flyers Energy USD675 million at closing, consisting of cash and at the company’s option, up to USD50 million of World Fuel Services common stock. The remaining USD100 million will be paid in equal installments over two years following completion of the transaction. The transaction will be principally funded with cash-on-hand, with the balance drawn from the company’s revolving credit facility. 

The transaction is subject to customary closing conditions, including regulatory approvals, and is expected be completed within 60 to 90 days. 

Ongoing strategy to accelerate growth in core activities

The acquisition reflects World Fuel Services’ ongoing strategy to accelerate growth in its core business activities, drive enhanced operating efficiencies and generate long-term shareholder value. The addition of Flyers Energy’s cardlock network will also provide a highly efficient, low-cost operating model with stable and ratable business activity to complement the company’s land segment activities in North America. 

“The acquisition of Flyers will significantly expand the breadth of our land business in North America, further enhancing our supply and distribution capabilities as well as our fleet fueling platform,” said Michael J. Kasbar, chairman and chief executive officer of World Fuel Services Corp. 

“The Flyers business is a perfect business and cultural fit for World Fuel given the relative markets in which we operate, and we are comfortable that our phenomenal Flyers team members will be at home with World Fuel,” said Walt Dwelle, managing partner, Flyers Energy Group. 

Strong cash flow generation

“Our continued strong cash flow generation contributed to a USD796 million cash position at the end of the third quarter. This positions us well to complete this strategic acquisition while continuing to maintain a strong and liquid balance sheet to further grow our core businesses and capitalize on additional strategic investment opportunities,” said Ira M. Birns, executive vice president and chief financial officer, World Fuel Services Corp. 

BofA Securities, Inc. acted as exclusive financial advisor to World Fuel Services in the transaction, and Norton Rose Fulbright and Kirkland & Ellis acted as legal advisors. DCA Partners acted as financial advisor to Flyers Energy Group, and Weintraub Tobin acted as legal advisor.