World Fuel Services Corp. (INT) has agreed to acquire Western
Petroleum Co. for at least $95 million, picking up operations
distributing motor fuel, branded aviation fuel and lubricants.
World Fuel Services, a marketer of fuel products and services,
saw its second-quarter profit jump by a third amid increasing
earnings at its aviation business, its largest by profit, and
higher revenue. Airlines and shippers of all types have been
increasing operations amid higher air travel and freight
volumes.
World Fuel called Eden Prairie, Minn.-based Western Petroleum
"one of the nation's largest independently owned petroleum
marketing companies."
Under the deal's terms, the purchase price may increase by as
much as $20 million depending on Western's net assets at closing,
which is expected within 60 days. World Fuel has the option to pay
up to $30 million of the price and $10 million of the possible
additional price in stock. Its market cap is about $1.5
billion.
The deal is expected to add 11 cents to 13 cents to World Fuel's
earnings per share in the year following the deal. The company is
projected to earn $2.24 this year, according to analysts surveyed
by Thomson Reuters.
World Fuel's shares closed Friday at $25.19 and were inactive
premarket.
-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240;
matthew.jarzemsky@dowjones.com