Buy, Build, Wait
Extended Holds Reflect Private Equity’s Evolving Playbook in Lubricants
Petroleum Trends International, Inc. – Publishers of JobbersWorld
July 18, 2025
Over the past decade, the U.S. lubricant distribution industry has undergone a significant transformation, largely driven by investment from private equity firms and the success of their portfolio companies. What was once a fragmented, regionally focused sector has consolidated into a sophisticated network of national and super-regional platforms, supported by institutional capital and designed for scale. RelaDyne, perhaps the most prominent example, exemplifies both the transformative power of this model and the new complexities shaping private equity strategy today.
Founded in 2010 with backing from AEA Investors, RelaDyne was created as a national distribution platform for lubricants, fuels, and industrial services. In 2016, Audax Private Equity acquired the company and launched an aggressive expansion strategy that culminated in over 80 acquisitions across the U.S. Audax sold RelaDyne to American Industrial Partners (AIP), in 2021, where it continues to pursue bolt-on acquisitions—including the recent addition of Dawson Oil Company. This acquisition demonstrates ongoing growth initiatives.
Today, RelaDyne operates as one of the largest lubricant distribution networks in the country, with a customer base that spans commercial, industrial, and automotive markets. It also owns several private-label brands, underscoring the reach and value creation that can be achieved through well-executed private equity strategies.
While the traditional investment timeline—build, grow, exit in five to seven years—remains the framework, execution is evolving. RelaDyne, now in its fourth year under AIP and its fifteenth year of continuous private equity ownership, has yet to exit. But this is not a reflection of weakness. Instead, it illustrates a broader trend: extended hold periods, not as a retreat from returns, but as a recalibration to match market realities and leverage alternative paths to liquidity.
A Shift Toward Strategic Patience
Holding periods across the sector are extending. According to Private Equity Info, the average U.S. private equity hold reached 5.7 years in 2024—the longest on record. Much of this is driven by macroeconomic conditions: stubbornly high interest rates, wide bid-ask spreads in deal valuations, and geopolitical uncertainty. But equally important is the strategic adaptation underway within private equity itself. Firms are holding on to their high-performing assets for longer, often through continuation vehicles and General Partner (GP)-led secondaries, which offer partial liquidity while preserving exposure to future upside.
These vehicles are not indicative of stalled performance; instead, they reflect a disciplined, patient approach to value realization. For strong platforms, a longer hold may be the most prudent strategy in a constrained exit environment—allowing firms to avoid forced sales and instead continue building equity value through performance.
Market Forces Tempering the Exit Environment
Lubricant distribution is particularly exposed to structural headwinds. Despite global forecasts projecting modest growth through 2030 (roughly 3% CAGR), the North American market continues to face long-term decline in demand volume. Extended drain intervals, electric vehicles, and other factors have all contributed to a 40% reduction in U.S. lubricant demand since the early 2000s. Consumption remains seasonally patterned but is structurally challenged by economic volatility, inflation, and a sluggish recovery in sectors such as manufacturing and construction.
Margins, once inflated during the COVID-era supply crunch, have normalized. Crude price stabilization and increased availability of products have narrowed distributor margins—particularly in commoditized lubricant grades. For platforms that entered near pricing peaks, this presents a valuation headwind that further complicates exit planning.
The Expanding Network of Private Equity Platforms
In addition to RelaDyne, other notable private equity-backed platforms have emerged across the lubricant space. Cadence Petroleum Group, backed by Wellspring Capital following an earlier investment by Tenex Capital, has established a substantial multi-regional footprint. Warren Distribution, one of the largest private-label lubricant blenders in North America, is owned by Pritzker Private Capital and has been combined with Highline Aftermarket to bridge the gap between manufacturing and distribution. Aurora Capital Partners entered the lubricant sector with its acquisition of premium blender Lubrication Engineers and recently expanded through the purchase of SWEPCO. First Reserve is invested in Palmdale Oil, while publicly traded Brenntag, previously backed by Bain Capital and BC Partners, maintains a significant presence in the U.S. lubricant market.
As private equity-backed lubricant distribution platforms grow and mature, their influence across the industry deepens—not only through expanded market share but also by reshaping competitive dynamics and operational priorities. Early-stage growth has been driven by aggressive acquisition strategies, which have enabled scaling and bargaining power with suppliers and buyers alike. As these platforms advance beyond acquisition-led expansion, the focus shifts toward internal optimization: enhancing supply chain efficiencies, investing in digital infrastructure, advancing ESG initiatives, and improving customer experience. However, scaling introduces challenges, including potential trade-offs in pricing flexibility, institutional knowledge retention, and responsiveness—factors that become especially critical when preparing for eventual exits to strategic buyers or public markets. This evolution intensifies pressure on both suppliers and smaller competitors while simultaneously opening opportunities for independent distributors to differentiate themselves through personalized and agile service offerings in niche or underserved segments.
Liquidity: IPOs, Secondaries, or Wait-and-See?
Exits are no longer limited to public offerings or strategic sales. Alternative liquidity options are growing. Moove Lubricants, backed by CVC Capital Partners, filed for a U.S. IPO in late 2023 but withdrew the application by early 2024 due to market volatility. This decision echoed a broader trend: IPOs are increasingly rare for industrial firms, with the window crowded out by technology and AI-driven names.
In response, private equity sponsors are turning to secondary buyouts, continuation vehicles, and GP-led processes. These strategies allow capital recycling and balance sheet optimization while extending hold periods on attractive assets—fitting today’s more cautious capital markets environment.
According to PitchBook, many in the PE sector expect improved exit conditions by mid-2026 to 2027, driven by lower interest rates, narrowing valuation gaps, and a reopening of public equity markets to industrial and distribution businesses. The return of strategic buyers with strong balance sheets may also reinvigorate M&A activity and drive competitive tension back into the market.
Lubricants as a Mirror of Modern Private Equity
Private equity’s impact on lubricant distribution has been transformative. PE platforms have transformed the industry, introducing professionalized management, capital discipline, and technology investment. These firms have gained pricing power, expanded their influence, and reshaped supplier-distributor relationships.
But the sector now stands at a crossroads. The private equity model is adapting: extended hold periods, innovative liquidity tools, and deeper operational engagement now define the playbook. Exit timelines may be longer, but the endgame remains the same—building, preserving, and ultimately capturing value.
For stakeholders across the lubricant value chain, the message is clear. Strategic patience, operational excellence, and alignment with long-term trends are no longer optional—they are prerequisites for success. Whether independent or institutional, those who navigate this landscape well will find opportunity in the complexity.
In this way, lubricant distribution has become a reflection of private equity itself: reshaped by capital, challenged by conditions, and driven by the conviction that value—when built with intention—will eventually find its market.
Looking Beyond Private Equity: The Future Landscape of U.S. Lubricant Distribution
As private equity firms ultimately exit their investments in lubricant distribution platforms, the industry is poised for a new phase of evolution. Drawing parallels from other consolidated sectors, the post-exit landscape is likely to feature greater centralization, more standardized pricing, and increased operational rigor under strategic or public ownership. While this may yield efficiencies and scale benefits, it could also reduce flexibility and responsiveness to niche customer needs.
This dynamic creates a potential opening for independent and regional distributors to differentiate themselves through specialized, agile service models tailored to underserved segments. Additionally, continued innovation in technology, sustainability, and customer engagement will be critical for all players seeking to maintain relevance and growth.
Ultimately, the lubricant business in the U.S. will reflect a balance between the institutional discipline brought by private equity and the entrepreneurial agility of smaller market participants, shaping a competitive environment that rewards strategic insight and operational excellence.
