Pargas Inc., a suburban Maryland firm that is a major national distributor of liquefied petroleum gas (propane), announced a substantial acquisition yesterday that will expand its business operations in the Midwest and South and should add $100 million a year to annual sales.
In a transaction valued at about $40 million, Waldorf-based Pargas signed a definitive agreement to buy the retail propane business of Sungas Liquids Inc. of Dallas.
Included in the purchase will be all facilities, equipment, merchandise and accounts receivable of the Sungas business through 80 retail outlets in Alabama. Arkansas, Georgia, Illinois, Mississippi, Missouri, Oklahoma, South Carolina and Tennessee. In addition to the retail-marketing operation, Sungas also markets gasoline, diesel fuel, appliances and other consumer goods. Pargas said it will pay $21.4 million for the fixed assets of the business and the balance for inventories and the receivable.
According to Pargas President N. L. Langley, Sungas Liquids already has entered into a long-term contract to supply all of the petroleum requirements for the operations of the business. About 650 Sungas employees will join Pargas when the sale is completed, Langley added.
Pargas does business mainly in the Middle Atlantic region, the Southeast, the Gulf Coast and the Pacific Coast. The acquisition announced yesterday will add three new states to Pargas' area of operation and annual revenues of $98 million to Pargas' 1980 volume of $238 million.
"The purchase of the Sungas Liquids operations is a major step in accomplishing Pargas' long-range propane market goals, including expansion into the fast-growing propane carburetion market," Langley added.
Pargas said it is exploring with its investment firm, Kidder Peabody & Co., several methods of financing the acquisition and "intends to obtain satisfactory financing in the near future."