Streicher Mobile Fueling to Acquire Shank Services
FT. LAUDERDALE, FL — Streicher Mobile Fueling, Inc., an outsourced refueling and fuel management solution provider for vehicle and equipment fleets, announced on January 31 that it has agreed to acquire the assets of Shank Services, a Houston-based provider of commercial fueling and heavy haul transportation services which also operates in Dallas/Fort Worth, Austin and San Antonio.
The company's wholly owned subsidiary, SMF Services, Inc., has entered into an agreement with Shank C&E Investments LLC, a privately held Delaware limited liability company operating as "Shank Services," to acquire substantially all of its assets and related business for a purchase price of $5.2 million, subject to certain performance-based contingencies.
SMF will acquire a fleet of 24 commercial fueling vehicles, including specialized fuel delivery, transport, oil and lubricant flatbed and tanker trucks and related support equipment; more than 600 portable fuel and lubricant tanks with more than 500,000 gallons of capacity used by customers to store products provided by Shank Services; 15 heavy haul tractor-trailer units designed to transport heavy construction equipment and other over-sized loads weighing up to 250,000 lbs.; a limited quantity of fuel and lubricant inventories; office and computer equipment and related specialized software technology; customer lists and agreements; certain other intangible assets; and an option to acquire outstanding customer accounts receivable. SMF will not assume any of Shank Services' current liabilities or debt. Based on preliminary unaudited information, in 2004 this business generated approximately $40 million in gross revenues from the delivery of 18 million gallons of fuel and the heavy haul transportation services.
Of the $5.2 million acquisition price for the acquired assets and related business, $3.3 million will be in cash and $1.9 million in a two-year deferred promissory note. The payment of the promissory note is dependent on the acquired operating assets meeting specific target performance objectives, and is subject to reduction if those targets are not achieved. If the customer accounts receivable are acquired by SMF, the cash portion of the purchase price will increase by an estimated $3.5 million. Closing of the transaction is to occur no later than February 28.
Shank Services employs approximately 70 personnel who are expected to join SMF. SMF intends to continue to operate the acquired assets and business under the trade name Shank Services. The company plans to combine and integrate its own Houston and Dallas/Fort Worth operations with those of Shank Services after the closing.