Franklin Mountain Capital (“FMC”) is a Scottsdale, AZ-based private equity investor seeking investments primarily across the energy value chain: downstream, midstream, upstream and oil field services. Founded in 2017, with initial total capital of $250 million provided exclusively by its principals, FMC targets lower to middle-market investment opportunities in North America. The founders are the former executive management team of Western Refining, Inc. (NYSE: WNR), an independent refiner with oil refining operations in the Southwest and Upper Midwest US, Northern Tier Energy (NYSE: NTE) a crude oil and retail marketer with operations in the Upper Midwest, and Western Refining Logistics LP (NYSE: WNRL), a master limited partnership with operations focused in the Permian and Bakken crude oil-producing regions. FMC’s team is composed of eight investment professionals with substantial energy experience and disciplines:
- Executive Management
- Risk Management
- Investor/Community Relations
FMC seeks to partner with well-established companies with a strong management team and significant growth potential. Working closely with management, FMC seeks to pursue continual improvement and drive organic growth as well as growth through acquisitions.
FMC is an "owner-friendly", long term-focused capital source that concentrates on control investments within the following energy industry subsectors:
- Crude oil refining and associated services
- Retail/wholesale gasoline marketing/services
- Crude oil and natural gas infrastructure (including pipelines, storage, terminals, trucking and services)
- Crude oil and natural gas production and processing
Ideal opportunities are ones in which FMC can partner with owners and existing management, combining FMC skill sets to complement existing company skill sets.
EBITDA greater than $5.0 million
Up to $250 million
Sustainable competitive advantages; Scalability; Investment made in partnership with existing management teams Geographic preference of US, Canada and Mexico
Type of Investment:
Acquisitions; co-Investments; reorganizations; mezzanine capital
Generally greater than 50%, or less than 50% interest in limited partner interests with 100% ownership of a general partner
Board of Directors; Active day-to-day management
In 1997, Western Refining Company (WRC) was founded by Paul Foster, Jeff Stevens, Scott Weaver and Ralph Schmidt. WRC was formed to manage a portion of the crude oil supply for, and, the refined product produced by, the legacy Texaco refinery located in El Paso. At that time, the El Paso refinery was being operated by Chevron pursuant to an operating agreement by Chevron.
In 2000, WRC purchased Refinery Holding Company (RHC), the owner of the legacy Texaco refinery in El Paso from a bank group led by CIT. RHC owned the Texaco refinery in El Paso. In 2003, WRC purchased the Chevron refinery in El Paso and a 530 mile crude oil pipeline system in West Texas from Chevron. Western operated the two El Paso refineries as a single refinery with an initial crude oil throughput capacity of 85,000 barrels per day, and within two years, was operating at a capacity of 103,000 barrels per day.
In January 2006, WRC took Western public at an initial share price of $17 per share raising proceeds of approximately $296 million and began trading on the NYSE under the ticker “WNR”.
In 2007, WNR purchased Giant Industries for approximately $1.4 billion which added three refineries (Yorktown, VA, Gallup, NM and Bloomfield, NM), 237 retail gasoline stations, and various crude oil and refined products logistics assets. In 2009, the operations of the Bloomfield and Gallup refineries were consolidated at the Gallup refinery and in 2010, the Yorktown refinery was converted to a terminal. The Yorktown terminal was sold to Plains All America in 2011.
In November 2013, WNR purchased the General Partner and a 38% interest in the limited partnership interests of Northern Tier Energy (NTI), a publicly-traded variable distribution MLP for $775 million from TPG Partners. In 2016, WNR purchased the remaining 62% limited partnership units for approximately $1.3 billion.
Also in October 2013, Western launched the IPO of Western Refining Logistics, LP, an MLP (trading under the symbol “WNRL”), focused on owning and operating crude oil and refined products logistics assets primarily in the Permian and Bakken.
In November 2016, Andeavor (NYSE: ANDV) announced an agreement to purchase WNR for approximately $6.4 billion. The transaction closed on June 1, 2017. From the 2006 IPO to the ANDV sale, WNR enterprise value increased more than five-fold, in addition to paying $981 million in cumulative dividends.
In October 2017, WNRL was acquired by Andeavor Logistics (NYSE: ANDX) in a unit-for-unit transaction and assumption of $280 million of net debt for a total enterprise value of approximately $1.7 billion. From the 2013 IPO in 2013 to the sale to ANDX, WNRL enterprise value increased approximately 70% in addition to paying out $86 million in cumulative distributions.
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Franklin Mountain Capital, LLC
4253 North Scottsdale Road
Scottsdale, AZ 85251
Direct: 602 325 4962
Mobile: 314 616 1828