NOCO Will Continue on Despite Sale of Its C-stores
TONAWANDA, N.Y. — With Marathon Petroleum Corp.'s (MPC) pending acquisition of 33 convenience stores from NOCO Energy Corp.'s, the NOCO Express banner will all but soon disappear from the upstate New York landscape.
Once the deal is complete, MPC will rebrand the locations as Speedway, the lead banner of its retail arm Speedway LLC, as Convenience Store News previously reported. The transaction also includes a 900,000-barrel capacity light product and asphalt terminal in Buffalo.
Six NOCO Express c-stores are not included in the deal.
After the sale, parent company NOCO will move forward focusing on its energy services business, which includes home, commercial and farm services.
The family-owned company also has expansion and acquisitions on its to-do list, notably in the highly fragmented home heating oil and propane business, according to The Buffalo News.
"We're a big part of the Western New York economy," said NOCO President James Newman said. "We want to become a bigger part of the green energy economy. But we still have a large business to run here in Western New York."
The other segments may not be as well known to the public as the stores, but they actually make up the bulk of NOCO's business. With the rebranding of its c-stores to Speedway, it will lose the brand awareness its retail operations brought the company, the report added.
"But there is much more to the convenience store business than meets the eye," Newman said. "We always said it was 90 percent of our visibility but 20 percent of our business."
The Newman family weighed the costs pressures of the convenience and decided to accept MPC's offer. NOCO has roughly 300 jobs connected to its retail operations and 15 jobs tied to its terminal.
"The emotional side of working with these people for many years and then having to give them this news has been softened a little bit in that Marathon/Speedway have come in and been very upfront and have certainly offered career opportunities to just about everybody that's working for us right now," Newman said.
Without its c-store segment and the terminal, NOCO will have revenues of approximately $350 million to $400 million, and 310 employees.
"We don't think we're going to see a lot of volume leave our sales portfolio, short of the volume that's going through our convenience stores," Newman adding that the MPC transaction will free up money to devote to the remaining business, like buying new trucks, hiring employees and investing in capacity storage in its bulk plants.
Newman expects NOCO will maintain a business relationship with Marathon, with the latter supplying gasoline and diesel fuel to NOCO, the report added.
"We're looking out the next 10 years — what do we want to be in the next wave of NOCO?" Newman said. "We were coal, we were oil, now we're in natural gas, we're in propane, we're in electric.
"We get out of all these heavily capital-intensive businesses with very modest returns," he told The Buffalo News. "We can move toward businesses that are emerging and have greater return, and we can start to really offer new products to our customers that we currently don't have in the portfolio."