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Done Deal
Oct 1, 2007
By: Patrick Hyland & Brian Richesson
LPGas Magazine | www.LPGASmagazine.com
Marketers recall their experiences, offer advice to others contemplating the sale of their propane retail business
Jenkins Gas Co.
Pollocksville, North Carolina
Bob Mattocks
 Bob Mattocks still has a picture of his late father-in-law in his office. John D. Jenkins has been deceased for 25 years, but the impression he left on Mattocks has been everlasting.
"He was my father-in-law, my best friend and my business partner," says Mattocks, 70. "We had a wonderful relationship."
Mattocks went to work for his father-in-law's North Carolina business, Jenkins Gas Co., in 1963. Mattocks remembers the first few years being tough financially, before the company sold half of its interest to Tropigas International Corp. to improve its capital. Jenkins Gas Co. grew substantially over the next two decades, with Mattocks becoming president in 1974. Jenkins Gas Co. bought back its interest from Tropigas in 1988 to become an independent, family-owned company again.
And it thrived. When Mattocks first started in the industry, the company was selling 120,000 gallons of propane a year - much of which was used for tobacco drying. That total grew to 40 million gallons by the time Jenkins sold to Liberty Propane in 2005.
"What was unique about us was, as large as we were, we were concentrated in pretty much the eastern half of North Carolina," Mattocks says. "We had a lot of gallons concentrated in one area."
His son, John Robert Mattocks, had ascended into the role of company president, succeeding the late Sam Rawls. As chairman of the board, Bob Mattocks was ready to slow his role. He felt the timing was right to make a move with the company, which had 200 employees at 20 branches. "I've seen companies get along well in the first or second generation, but in the third generation things deteriorate and people don't get along," recalls Mattocks of his reasoning.
He also wanted to release his two daughters and his grandchildren from the company and allow them to receive proceeds from a sale.
Mattocks had John Robert make the final decision, and the son agreed. John Robert kept six of Jenkins' branches, giving him equity and future growth of those companies. We just looked at all of the positives and potential negatives and prayed about it," Mattocks says of his family and key company officials. "My wife is a wonderful person with a lot of insight, and we talked to our children. We all agreed."
Liberty wanted to buy a large company that would move it closer to going public, Mattocks says, and Jenkins provided that.
John Robert is now a regional vice president for Liberty overseeing the southeastern United States, and Mattocks remains involved in the industry by serving on Liberty's national advisory board and serving as chairman of the Jenkins board. "In retrospect, if I had to do it over again I probably would do it quicker," Mattocks says of his decision. "I haven't let go."
Permagas Inc.
Lake Stevens, Washington
Joe Sternola
 A little "soul searching" helped Joe Sternola decide to sell the assets of Permagas Inc., his Lake Stevens, Wash.-based propane business, in January 2006.
"You have to sometimes grab a hold of where you are in this world, evaluate where you're going and how you're going to get there and decide what you're going to do," Sternola says.
The 71-year-old watched a company that he started with "a pickup truck and $500" grow successfully over 35 years of his leadership. At the time of its asset sale to Liberty Propane, Permagas was selling about 5 million gallons of propane annually to about 2,000 customers throughout areas in Washington, Idaho and Alaska.
"My decision was based on the belief that I had contributed most of what I could for the welfare of the company, and the company had done the same for my welfare," Sternola says. "After it grows to the point where one person gets to be nearly irrelevant, it's time to reevaluate."
With 20 employees under Sternola, Permagas serviced a wide range of customers, mostly retail but some wholesale, and a wide range of tank sizes – from five gallons to 30,000 gallons.
"I have a management style where I train and assign responsibility, then get out of the way," Sternola says. "The employees took ownership of their job and provide excellent customer care, so they didn't need to get my permission for their decisions. They went out there and got the job done – and they still do."
Sternola recalls numerous inquiries from national companies wanting to buy Permagas, but he never felt comfortable with their visions for Permagas' future, its employees and customers. Then Liberty Propane came along and met Sternola's standards.
"What made Liberty different is they reflected (and financially recognized) all the values of the business," says Sternola, stressing the dedication of his employees and a manager prepared to assume leadership, the company's market position and resources for growth, its quality customers and its additional revenue sources, including a rail terminal.
"I thought the sale would do more for me, for Permagas and for the employees if I stepped aside and let them continue to grow with the additional resources provided by Liberty Propane," Sternola adds. "It was the right decision for them as well as for me."
Sternola now has a partnership interest in Liberty Propane, so he remains involved as an owner "once removed." He also continues to be the representative of the NPGA to the Uniform Plumbing Code Committee and the LP Gas Association of Canada to the NFPA 58 Committee. And if the right opportunity came along, he would consider buying another propane company.
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