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Cumberland Farms Closes Sale of Gulf Oil

FRAMINGHAM, Mass. — Gulf Oil LP has officially changed hands.

Chelsea Petroleum Products Holdings LLC, an affiliate of ArcLight Capital Partners, completed the purchase of Gulf Oil from Cumberland Farms Inc. 

As CSNews Online reported in June, the Haseotes family, owner of Cumberland Farms, inked a deal to sell Gulf Oil for a reported $1 billion.

In a related transaction, Blue Hills Fuels LLC, another ArcLight affiliate, purchased Gulf's Assured Dealers business. The Assured Dealers business collects rent from more than 200 owned or leased, but non-operated, independently franchised sites under the Gulf or Mobil brand that also purchase branded product under contract from Gulf.

"Gulf is well-established among consumers as a top tier brand and in recent years has experienced significant growth of marketed volumes," said Dan Revers, managing partner and co-founder of Boston-based ArcLight. "The ownership of a major petroleum wholesaler and terminal operator represents a significant opportunity in today's energy industry and is a key component of our investment strategy."

Gulf is a terminal operator and wholesaler of refined petroleum products, including heating oil, diesel fuel, and gasoline. It marketed 3.3 billion gallons of products in 2014.  

It is a leading distributor of quality motor fuels, both gasoline and diesel, to more than 2,300 branded outlets as well as 1,000 private-label retail outlets operated by major chain retailers terminals.

Gulf also owns and operates a comprehensive network of 12 proprietary refined product storage terminals, with connectivity via the Buckeye and Laurel pipelines as well as barge access that allows Gulf to source product from Canada, Europe, the Caribbean, and all of the major United States refining markets.

Now that the transaction has closed, Jerry Ashcroft will become president and CEO of Gulf. He has held executive leadership roles at Buckeye, Colonial Pipeline and JP Energy Partners. 

Also on the leadership team is Mike Campbell, chief financial officer (CFO), who previously held the role of CFO at Crestwood Midstream Partners and Crestwood Equity Partners, the general partner of CMLP and Inergy Midstream, LP.

Gulf will maintain its headquarters in Massachusetts and retain its name and limited partnership structure. This transition is not expected to disrupt existing practices or agreements.

Pennsylvania Challenge

However, the transaction is facing a legal challenge in Pennsylvania as the state Attorney General Kathleen G. Kane's office announced two legal filings made in federal court in relation to the deal.

The complaint and consent judgment filed in the U.S. District Court for the Middle District of Pennsylvania resolve competitive concerns associated with the acquisition of Gulf Oil by ArcLight Energy Partners Fund VI LP, according to the state attorney general's office.

The filings were made in conjunction with an administrative complaint issued by the Federal Trade Commission (FTC).

According to a release, the state attorney general's office and the FTC started their investigation of the proposed acquisition after an agreement for the deal was signed in May. The Office of Attorney General's Antitrust Section examined whether the acquisition would have the effect of substantially lessening competition concerning gasoline terminal services and distillates terminal services across the Pennsylvania.

The investigation showed the proposed acquisition in some areas would reduce the number of terminals from two to one, or from three to two. The parties have agreed to divest four terminals in the state to proceed with the transaction. The terminals are located in Altoona, Pittston Township, Mechanicsburg and Williamsport. The legal filings call for the terminals to be divested to a third party.

According to the filings, ArcLight owns and operates 12 refined petroleum products storage terminal facilities in Pennsylvania. Gulf Oil owns and operates seven terminals in Pennsylvania.

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