The Phillips 66 Acquisition of Hunt & Sons, Inc.
In news that apparently flew under the radar of many since August of 2023, Phillips 66 acquired selected assets of Hunt & Sons, Inc.
Hunt & Sons is a diversified petroleum distribution company specializing in commercial fleet fueling services, bulk fuel supply, and comprehensive lubricant solutions for industrial, commercial, agricultural and automotive use. Hunt & Sons is based in Sacramento, California, and has been in operation for more than 75 years as a family-owned business.
The Hunt & Sons product line features a wide array of petroleum products, including gasoline, low sulfur diesel fuel, biodiesel, E85, kerosene, jet fuel, and a full line of Chevron (Chevron’s ‘First Source Elite Marketer), Valvoline and Phillips 66 lubricant products. According to JobbersWorld sources, however, the transaction does not include the assets of Hunt & Sons lubricants business.
Although Phillips 66 has been quite about acquiring Hunt & Sons, questions about the deal have been swirling for several months and the reason they have is because some wonder if the acquisition is a harbinger of major oil companies coming full circle by getting back into delivering lubricants direct. Understanding the lubricant business was not included in the transaction, folks will have to look elsewhere for signs that majors are interested in going back to the days of delivering product with their own trucks and drivers.
The acquisition still does, however, raise some questions. Specifically, why would Phillips 66 acquire a large fuel distributor on the West Coast. Although JobbersWorld has no first-hand knowledge of what drove their decision to acquire Hunt & Sons, there are some dots that appear to connect.
The first dot speaks to the news in May 2022 that Phillips 66 was moving forward with Rodeo Renewed, the project to convert its San Francisco Refinery in Rodeo, California, into one of the world’s largest renewable fuels facilities. Upon completion of Rodeo Renewed, the converted facility will no longer process crude oil and instead use waste oils, fats, greases and vegetable oils to produce an initial 800 million gallons per year (over 50,000 barrels per day) of renewable transportation fuels, including renewable diesel, renewable gasoline and sustainable aviation fuel.
The second dot is about fuel demand. The Governor of California, Gavin Newsom has made it clear that the state plans to cut California gasoline demand by 94% by 2045, in an effort to reduce climate-damaging emissions by 85%. Importantly, California is the second largest consumer of gasoline in the country. In addition, it is the largest consumer of jet fuel. With that said, the Phillips 66 world-scale renewable fuels plant in Rodeo will be in the right place at the right time.
This takes us to the third dot. How does Phillips 66 get its enormous volume of renewable fuel coming on stream to the market? A big part of the answer may be Hunt & Sons.
Operating from its headquarters in Sacramento, Hunt & Sons, Inc. owns and operates 13 office and warehouse facilities, 38 commercial cardlock fueling sites, and has more than 450 employees. Hunt & Sons is one of the largest Pacific Pride and CFN franchisees in California. And the company is one of the few cardlock marketers that can offer the Pacific Pride, CFN (Commercial Fueling Network) and Fleetwide Card Services, all on a single invoice and its customers have access to over 236,000 fueling sites nationwide.
So why did Phillips 66 acquire selected distribution assets of Hunt & Sons? The answer may be that Hunt & Sons fuels business is an ideal fit to provide last mile logistics for Phillips 66 to move its new capacity of renewable fuels to the market.
Raymond James & Associates, Inc. served as Hunt & Sons, Inc.’s exclusive sell-side advisor in connection with the transaction.
Phillips 66 manufactures, transports and markets products that drive the global economy. The diversified energy company’s portfolio includes Midstream, Chemicals, Refining, and Marketing and Specialties businesses. Headquartered in Houston, Phillips 66 has employees around the globe who are committed to safely and reliably providing energy and improving lives while pursuing a lower-carbon future.
Hunt & Sons, Inc. is a California-based petroleum products distributor. Operating from its headquarters in Sacramento, Hunt & Sons, Inc. family-owned business, and has been in operation for more than 75 years. Hunt & Sons owns and operates 13 office and warehouse facilities, 38 commercial cardlock fueling sites, and more than 450+ employees. The Hunt & Sons product line features a wide array of petroleum products, including gasoline, low sulfur diesel fuel, biodiesel, gasoline, E85, kerosene, jet fuel, and a full line of Chevron, Valvoline and Phillips 66 lubricant products. The company purchase its petroleum products directly from world class major refiners, allowing Hunt & Sons to pass the savings onto its customers. Hunt & Sons delivers products using its large fleet of continuously maintained and upgraded delivery trucks, manned by professionally trained and certified drivers.
About Raymond James & Associates, Inc.
Raymond James is a leading financial advisor to the convenience store and petroleum distribution industries. The firm’s Convenience Store & Fuel Products Distribution Investment Banking group is dedicated to providing a full range of advisory and capital raising solutions to petroleum distributors, retailers, and related suppliers and service providers. Its senior banking team has a strong track record of working with industry leaders and maintains deep relationships with key industry equity investors, specialty lenders, sale-leaseback providers and other capital sources. In addition, as merger and acquisition specialists, we understand the concerns of buyers and sellers and how to drive value for our clients. Most importantly, our experienced and seasoned transaction team has a history of delivering results.
Good to see Phillips 66 growing to new horizons for the future.