Capital Oil & Gas Inc. said it has entered into negotiations to acquire or lease 11 full-service gas and convenience stores in Florida, which will add to its growing retail petroleum and mini-mart portfolio.
The company said the acquisition of these additional stations, upon completion of negotiations and taking possession of the properties, could mean the company will see an additional $55,000,000 to $60,000,000 in gross revenue per year.
Upon the successful completion of these 11 properties – and the pending closing of another three previously announced properties – the company will control 15 properties with projected annual gross revenues of $85,000,000 to $92,000,000 per year, with a pre-tax profit margin of between 8 and 12%.
The company said it will pay for the acquisitions/leases from existing cash flow and bank financing and cash flow from the new properties, and will not alter the capital structure of the company, as management views any use of its equities to finance these acquisitions as being totally against the company’s overall growth strategy.
"As previously stated, it is the intent of executive management to control either by acquisitions or leases enough stations to generate a minimum of $100,000,000 per year in revenue, with a potential pre-tax profit margin of 8 to 12% per year overall,” said Ariel Rodriguez, the company’s president and CEO. “The company believes that it would then be in a position to become a fully reporting company and leverage its buying power from its suppliers.”
The chairman of the company is former Gen. Wesley Clark, a Democratic primary candidate for the 2004 presidential elections.