2016...(610) 337-7000 n 460 n. gulph road n king of prussia, pa 19406 as another heating season...
TRANSCRIPT
America’s Propane Company®
2016 INDUSTRY UPDATE
Well Run Operations Is “safety” your middle name? Do you go out of your way to deliver great customer service? If the answer is “yes”, you should be proud of what you’ve built. These are the foundations of a truly exceptional propane business.
Consistent Volume and MarginThe best propane companies have long track records of profitable operations and bright futures with growth potential. Successful financial management is extremely admirable in a constantly fluctuating environment.
Good Quality AssetsWell‐maintained trucks and freshly painted tanks show just how much you re‐invest in your business. We know how much work this takes and it won’t go unnoticed.
High Company Tank OwnershipDo you follow an overall policy of company‐owned tanks? You know that the stability and loyalty of your customers underpin your business.
What We Look For in a Company
AmeriGas is interested in high‐quality propane companies nationwide. If you can check these boxes for your company, you are our ideal candidate and we’d love to talk with you.
(610) 337-7000 n 460 N. Gulph Road n King of Prussia , PA 19406
As another heating season comes to a close, we hope it will give you a chance to look toward the future.
Over the past 24 months, 16 companies from multiple states have become part of the AmeriGas family. We have already closed an additional three this current year.
We pride ourselves on evaluating each and every opportunity creatively, fairly, and with the utmost discretion. Time and again we have worked diligently to meet a seller’s needs. For example, we have maintained the seller’s name, after close, in some of our recent acquisitions. This approach of working closely with the seller has proven attractive to hundreds of owners in all 50 states.
We understand that choosing to sell your company (and who to sell to) is hard. But with the financial, personnel, and distribution resources of America’s largest propane company we promise to:
n Deliver a fair value for your business
n Expand product offerings to your customers
n Provide opportunities for nationwide career advancement for your employees
Sincerely,
Daniel Dixon Group Director Business Development
Well Run Operations Is “safety” your middle name? Do you go out of your way to deliver great customer service? If the answer is “yes”, you should be proud of what you’ve built. These are the foundations of a truly exceptional propane business.
Consistent Volume and MarginThe best propane companies have long track records of profitable operations and bright futures with growth potential. Successful financial management is extremely admirable in a constantly fluctuating environment.
Good Quality AssetsWell‐maintained trucks and freshly painted tanks show just how much you re‐invest in your business. We know how much work this takes and it won’t go unnoticed.
High Company Tank OwnershipDo you follow an overall policy of company‐owned tanks? You know that the stability and loyalty of your customers underpin your business.
What We Look For in a Company
AmeriGas is interested in high‐quality propane companies nationwide. If you can check these boxes for your company, you are our ideal candidate and we’d love to talk with you.
What We Look For In A Company
It is time to sell…now what?
1.) Speak with shareholders and family members
This probably seems like an obvious first step, but it is often overlooked. After a lifetime of hard work, it is important to ensure that all parties recognize your plans for the future. Try to spend some time understanding how a sale will impact those who helped you build your business.
2.) Work with a lawyer and accountant
The sale of a business involves some complexities. Be sure to understand how the sale will impact you and your wallet.
‐How will your business structure (sole proprietorship, partnership, corporation) affect the sale?
‐What are the tax implications of a sale?
3.) Understanding ValuationsEBITDA is an acronym that stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. EBITDA is what is left over after subtracting your operating expenses and the cost of propane from your revenue
Potential buyers use EBITDA to measure the profitability of your business. It is a way to compare different propane companies on equal footing. EBITDA takes into account your volume, margin, and gross profit. A multiple of EBITDA is then placed to determine your company value.
It Is Time To Sell...Now What?
Amerigas – an experienced partner
As America’s largest propane retailer, we have the resources and experience to look at your business unlike anyone else. We believe that translates into unmatched advantages for an owner considering a sale of their business.
Provide Career Opportunities for Your Employees
Whatever you, your shareholders, and family members decide, your remaining employees will join with the nearly 8,500 hard working men and women at AmeriGas today.
AmeriGas serves approx. 2 million customers in all50 states from approx. 2,000 locations
Customized Deal Structuring
Our financial strength becomes your asset. From all cash transactions to deal structures optimizing your post‐tax net, we’ll work hand in hand with you to maximize your outcome.
Full health benefits 401k retirement program Leadership training opportunities Flexibility to move nationwide
It is time to sell…now what?
1.) Speak with shareholders and family members
This probably seems like an obvious first step, but it is often overlooked. After a lifetime of hard work, it is important to ensure that all parties recognize your plans for the future. Try to spend some time understanding how a sale will impact those who helped you build your business.
2.) Work with a lawyer and accountant
The sale of a business involves some complexities. Be sure to understand how the sale will impact you and your wallet.
‐How will your business structure (sole proprietorship, partnership, corporation) affect the sale?
‐What are the tax implications of a sale?
3.) Understanding ValuationsEBITDA is an acronym that stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. EBITDA is what is left over after subtracting your operating expenses and the cost of propane from your revenue
Potential buyers use EBITDA to measure the profitability of your business. It is a way to compare different propane companies on equal footing. EBITDA takes into account your volume, margin, and gross profit. A multiple of EBITDA is then placed to determine your company value.
Amerigas - An Experienced Partner
Getting to Know Each OtherWe always like to get started with an informal face‐to‐face meeting (or over the phone if you prefer). We highly recommend taking some time at the beginning to get comfortable with the process (and us) and getting answers to your questions.
Confidentiality AgreementsWhile we promise the utmost discretion during the entire process, we back it up with a confidentiality agreement protecting both you and us.
Sharing InformationTo evaluate your business fully and give you the largest valuation possible, we’ll ask you for details on your volume, margin, expenses, and assets. We’ll never ask for information that individually identifies your customers and employees
Business ValuationWe’ll do our best to give you a fair and complete valuation of your business. And what’s more, we won’t just hand you a number; we’ll do our best to explain how we got there and how you can help us refine it.
Deal StructureWhether you are a “C” corporation, “S” corporation, “LLC”, or Sole Proprietor, we will work with you on structuring a deal to help you with your tax situation. Together we’ll identify the deal structure that can get you the most after tax dollars. We can answer questionsfrom your accountant or advisors to help you in this most important issue.
Letter of IntentThe letter of intent signifies your acceptance of our offer to move onto the next step (due diligence). The letter of intent specifies a period of time where we both agree to the exclusiveness of the deal.
Due DiligenceDuring due diligence, we will work with you to validate and confirm the financial and business information that the offer was based on. It takes a collaborative effort to get through this next‐to‐last step successfully.
Closing and TransitioningOn the day of closing, we’ll verify the inventory and assets and jointly sign the purchase agreement. In the weeks leading up to this, we’ll work with you to make sure the transition process goes smoothly for employees and customers.
TimelineThe timing depends on your goals. We can close as quickly as 6 weeks or stretch out the transition over 6 months. We will work with you to close the transaction within a timeline that works for you.
Steps in the Acquisition Process
Steps In the Acquisition Process
Getting to Know Each OtherWe always like to get started with an informal face‐to‐face meeting (or over the phone if you prefer). We highly recommend taking some time at the beginning to get comfortable with the process (and us) and getting answers to your questions.
Confidentiality AgreementsWhile we promise the utmost discretion during the entire process, we back it up with a confidentiality agreement protecting both you and us.
Sharing InformationTo evaluate your business fully and give you the largest valuation possible, we’ll ask you for details on your volume, margin, expenses, and assets. We’ll never ask for information that individually identifies your customers and employees
Business ValuationWe’ll do our best to give you a fair and complete valuation of your business. And what’s more, we won’t just hand you a number; we’ll do our best to explain how we got there and how you can help us refine it.
Deal StructureWhether you are a “C” corporation, “S” corporation, “LLC”, or Sole Proprietor, we will work with you on structuring a deal to help you with your tax situation. Together we’ll identify the deal structure that can get you the most after tax dollars. We can answer questionsfrom your accountant or advisors to help you in this most important issue.
Letter of IntentThe letter of intent signifies your acceptance of our offer to move onto the next step (due diligence). The letter of intent specifies a period of time where we both agree to the exclusiveness of the deal.
Due DiligenceDuring due diligence, we will work with you to validate and confirm the financial and business information that the offer was based on. It takes a collaborative effort to get through this next‐to‐last step successfully.
Closing and TransitioningOn the day of closing, we’ll verify the inventory and assets and jointly sign the purchase agreement. In the weeks leading up to this, we’ll work with you to make sure the transition process goes smoothly for employees and customers.
TimelineThe timing depends on your goals. We can close as quickly as 6 weeks or stretch out the transition over 6 months. We will work with you to close the transaction within a timeline that works for you.
Steps in the Acquisition Process
MEET THE TEAM
DANIEL DIXON / Group Director [email protected]
As a 19 year veteran of the propane industry, Daniel brings extensive knowledge and experience with valuations/appraisals, mergers & acquisitions, and business reviews representing both buyers and sellers. Active in the NPGA, Daniel has served on the Executive Committee and NPGA Board and currently serves on the PERC Council. He has an accounting degree from Ole Miss and an MBA from Alabama. Daniel is married with 3 children.
office / 610 .337.7000 x 1050 cell / 256 .275 .1870
ANDY HINO / Director [email protected]
Proudly celebrating 22 years at AmeriGas, Andy has worked in a variety of roles throughout the company including acquisitions, divestitures, internal audit and various operational and project management assignments. Prior to his involvement with AmeriGas, Andy worked as a senior internal auditor for Sterling Winthrop Pharmaceuticals of New York City and as an auditor for Arthur Andersen & Company. He holds his accounting degree and MBA from Villanova University and is a CPA (Inactive). Andy is married with two daughters.
office / 610 .337 .7000 x 1047 cell / 610 .517 .1706
CHRIS GRIFFIN / Director [email protected]
Chris started in the propane industry in 2011 as a senior auditor at AmeriGas where he got a firsthand look at field operations all across the country. He transitioned to the acquisitions team in 2012 and was promoted to Acquisitions Director in 2015. Prior to AmeriGas, Chris worked in the accounting and internal audit departments of Ernst & Young LLP and Comcast Corporation, both in Philadelphia, PA.
office / 610 .337 .7000 x 1091 cell / 215 .260 .0429
BRENDAN HECK / Acquisitions Manager [email protected]
Brendan began with AmeriGas in 2014 and currently serves as an acquisitions manager. He held a position in the Treasury department before moving to the acquisitions team. Prior to AmeriGas, Brendan was a fixed income portfolio manager.
office / 610 .337.1007 cell / 267 .337 .0920
America’s Propane Company®
610-337-7000amerigas.com/acquisitions [email protected]
460 N. Gulph Rd.King of Prussia, PA 19406
CREATIVE
We pride ourselves on evaluating each and every opportunity creatively, fairly, and with the utmost discretion.