Titan's APPCO Acquisition is Just the Beginning

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Titan's APPCO Acquisition is Just the Beginning

By D. Gail Fleenor

"APPCO is our first acquisition in the energy space," Bryan Chance, president and CEO of Titan Global Holdings Inc., told CSNews Online in an exclusive interview at APPCO's headquarters in Blountville, Tenn. "As a company, Titan is committed to additional acquisitions in the energy sector."

The diversified holding company based in Richardson, Texas, acquired 100 percent of the outstanding common stock of privately held Appalachian Oil Co. d/b/a/ APPCO Convenience Centers in September 2007. In addition to a network of 56 convenience and gas locations in Tennessee, Virginia and Kentucky, APPCO also serves more than 160 wholesale customers.

"By using APPCO's distribution network and seasoned management team, combined with our capital and resources, we are looking at making an impact in this market. APPCO provides a great platform to grow in the energy sector," Chance said.

The acquisition is the first of Titan's newly formed subsidiary, Titan Global Energy, and provides scale to explore other acquisition opportunities, he explained. The move is expected to contribute $433 million to Titan's projected $747 million in revenue for fiscal 2008, according to the company's Web site, and Titan has also applied for listing on NASDAQ. The public company's stock, listed TTGL, is currently sold as over-the-counter equity.

"Titan has a solid vision about what they want to do in the energy sector," Marty Anderson, president of APPCO's convenience store division, told CSNews Online. In addition to acquisitions of other c-stores in the Southeast, Anderson said Titan plans to make purchases throughout the energy cycle, "from ground to gas pump" including terminals and natural resources.

Subsidiaries of Titan provide some synergies in the acquisition such as offering handsets and prepaid cellular airtime from Ready Mobile, part of Titan's communications division, in select APPCO stores. And in its global brands division, Titan is in the process of acquiring USA Detergents, a manufacturer, licensee and/or distributor of laundry, cleaner and toothpaste brands such as Arm & Hammer, Brillo, Pepsodent and Oxymax. APPCO is in talks to expand its product mix to include some of these products in its stores, Anderson said. "These are the kind of synergies which will make all of Titan's subsidiaries stronger," he said.

APPCO, one of the Southeast's largest distributors of branded and unbranded petroleum products, will operate as a wholly owned subsidiary of Titan with its management team intact, and APPCO's corporate offices will remain in Blountville, according to Anderson.

"Any acquisitions will be operated from here," he noted. Two new stores are in the permitting and planning stage -- one in Johnson City, Tenn., and one in Kentucky. There are no plans to close any stores, he said.

"The acquisition of APPCO by Titan will give us the resources needed to grow and compete in the energy sector in today's competitive environment," Anderson said. "Under Titan's ownership, we expect some aggressive acquisition activity. This is one of the most exciting times in my career."