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Friday, 04 October 2013 15:19

MiBiz 2013 M&A Deals & Dealmaker Awards Buyer-Seller Finalist: Tom Fehsenfeld

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Tom Fehsenfeld Tom Fehsenfeld MIBIZ FILE PHOTO: ADAM BIRD

Crystal Flash Energy President Tom Fehsenfeld has been finding a promising climate for acquisitions across Michigan lately. In the last 20 months, Crystal Flash acquired six companies — four of them in the last 12 months. These six acquisitions added nearly $70 million in revenue to the petroleum and fuels wholesale distribution firm, more than $50 million of which occurred in the last year.

The wave of deal activity for the Grand Rapids-based firm resulted from Fehsenfeld and his team contacting the owners of 250 similar businesses across five states in the last 12 months, all while following a systematic process, he said.

Crystal Flash worked to develop its targeted growth strategy with advisers at The Charter Group, a Grand Rapids-based mergers and acquisitions consultancy.

“Like a lot of sales processes, it’s a numbers game, but you have to make an effort to make contacts,” he said. “It’s kind of like a funnel, and it takes weekly attention.”

As an owner of a third-generation, family-owned company, Fehsenfeld can meet many of the business owners at their level since many of them have been building their businesses for decades.

At 64, Fehsenfeld said he’s working harder than he ever has.

“These owners that we deal with have a lot of sweat equity in their businesses,” he said. “Being a family company ourselves, I think the owners we deal with feel that we’ll be able to come in and take care of their employees and try to give them a fair deal so they can see the benefit of their lifetime of work.”

Fehsenfeld started working for the company in 1974. When he came into the company, his task was to take the 15 full-service gas stations his father had built and continue to growth the business. Over the next 20 years, Fehsenfeld eventually built and operated 32 self-service gas stations and convenience stores.

At the same time, he started to develop the distribution side of the business. In 2002, he sold 32 gas stations to Speedway, moving solely into distribution. This move set the stage for next chapter of the company and defined Fehsenfeld’s vision to move into five states and serve the entire Great Lakes region. Most recently, the company acquired Monroe-based C. Barrons & Sons, which has about $40 million in sales and 25 employees and serves the Southeast Michigan and northern Ohio markets, Crystal Flash’s first presence in Ohio.

While there is no timeline in place for the strategy to be fully implemented, the company is accelerating its movement in the right direction, Fehsenfeld said.

“In the early 2000s, we had a couple of losing years and had trouble transitioning from a company that had two different divisions, retail and distribution, to just distribution,” he said. “It took three or four years to sort things out. We went from a company with 650 employees to 250 employees, and we had to change a lot of how we operated.”

After getting past that volatility, Fehsenfeld said the company has been performing consistently with good profitability since 2006 and good growth through the acquisitions.

Looking ahead, Crystal Flash is continuing to pursue acquisitions and is currently vetting two potential purchases.

“There are lots of owners who started in 1950s and are now just looking for an exit strategy,” he said. “There aren’t many drivers out there, but things are getting more complicated for small companies to comply with regulations.”

Financing, upgrading equipment and keeping up with Department of Transportation compliances are just a few of the issues impacting the industry, he said.

“We’re pretty simple-minded when it comes to putting deals together,” he said. “We’re not into a lot sophisticated financial maneuvers, and I think that’s appealing to owners we work with because most aren’t big companies. We offer the kind of emphasis on giving them value instead of just a big check.”

  • Company: Crystal Flash Energy
  • Annual sales: $200 million
  • Full-time Michigan Employees: 250
  • Business description: Crystal Flash is a wholesale distributor of petroleum-based products and fuels ranging from gasoline to lubricants.
  • Best practices for effective dealmaking: Fehsenfeld said when it comes to deal making, the company emphasizes having a clear process, being a good listener when talking to owners and making sure to bring greater value — instead of just a big check.
  • Spouse/Children: Wife, Carolyn. Three children: son, Alan, who is Crystal Flash’s CFO; daughter, Dana, a fabric designer; son, Ben, co-director of Fourth World, an international anti-poverty agency.
  • Academic Degrees: Walden University, Ph.D. in organizational design; MBA and undergraduate degree, University of Michigan
Read 2545 times Last modified on Friday, 04 October 2013 15:37

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