Ferrellgas Acquires Wylie LP Gas, Salathe Gas, North Star Exchange

(November 15, 2018) — Ferrellgas Partners LP (Overland Park, Kan.) has acquired Wylie LP Gas Inc. of Lubbock, Texas; Salathe Gas Co. of Harvey, La.; and North Star Exchange Inc. of Walton, Ind. Terms of the deals were not disclosed. The transactions are expected to be immediately accretive.

The three companies are longtime, third-party distributors for Ferrellgas’ Blue Rhino barbecue tank exchange division. Wylie delivers propane cylinders to retailers in northwest Texas and south-central New Mexico. Utilizing cylinders produced at Ferrellgas’ Livingston, Texas facility, Salathe Gas Co. serves the entire state of Louisiana and the southern half of Mississippi from its offices in Harvey, Lafayette, and Ruston, La. and Vicksburg, Miss. North Star Exchange has a production facility in Walton, along with six propane tank staging areas in Indiana and Ohio, from which the company serves customers in Indiana, Ohio, and Kentucky.

Regarding the acquisitions, Ferrellgas said the step was to maximize EBITDA in the propane tank exchange business by internalizing and eliminating commission payments made to certain Blue Rhino independent distributors.

In October 2017, the company made a similar move when it purchased Tapper Propane Equipment Inc. of Decatur, Mich. “We are pleased to welcome Salathe Gas and North Star Exchange and their employees to the Ferrellgas family,” said Jim Ferrell, Ferrellgas president and interim CEO. “These transactions are an important part of our ongoing strategy to further maximize profitability in this growing piece of the business by purchasing former Blue Rhino independent distributors we deem strategic to our tank exchange operations.

Ferrell added the purchases give his company the opportunity to better serve tank-exchange customers while improving operational efficiencies and lowering production expenses, and were an indication of the company’s commitment to growing its core propane business. “This is another important step forward for Ferrellgas and Blue Rhino as we seek to provide the best service possible to our retail tank exchange customers. As Blue Rhino continues to expand its customer base, we will likewise continue to identify new and improved ways to efficiently and effectively expand our capabilities to meet demand.”