Insight Equity Acquires Direct Fuels

Insight Equity Holdings, Inc. (July 14, 2003)
Public Press Release

The private equity firm Insight Equity announced today that it had acquired all of the assets of Direct Fuels, a company with over $220 million in revenues focused on motor fuel distribution as well as refining and blending operations in the greater Texas area.

Direct Fuels is one of Texas' largest regional fuel distributors, currently supplying the majority of the Dallas-Ft. Worth metroplex area's supply of conventional, non-reformulated, gasoline. The firm also ships a significant percentage of the area's diesel requirements. Direct Fuels is also the only terminal in the Dallas area that has access to major pipelines, a rail terminal to enable significant ethanol blending capability, as well an onsite fuel processing capability recognized as one of the most efficient in the southwest, with plant operating efficiencies substantially above industry norms.

Direct Fuels supplies over 10 million gallons per month of unbranded fuel supplies at its terminal locations and additionally, supplies over 5 million gallons per month on a branded and unbranded wholesale business. Citgo, Diamond Shamrock, Conoco, and Fina are among the premier brands which Direct Fuels serves on a daily basis.

As part of the transaction, Insight secured $20 million in term and revolving credit from PNC Bank, N.A. Insight was able to accomplish this financing despite the volatile and uncertain financing environment in March and April of this year during the war in Iraq. Insight Equity provided most of the equity involved in the transaction, with Najeti Ventures purchasing a minority stake in the firm. Specific terms of the deal were not disclosed.

The head of Insight Equity and the firm's new CEO, Ted Beneski, commented "Direct Fuels has a secure, strategic position in Texas and will provide an ideal growth platform to meet our plan of tripling revenue and profits over the next two years." He continued, "suppliers have recognized the potential of the firm and on the date of closing, extended over $3 million in fresh financing to the newly independent Direct Fuels."

The President of the firm, Warner Williams, remains with the company in that position, as does the company's Chief Technical Officer and main terminal manager, Terry Nevels. Ross Gatlin of Insight Equity has assumed the role of Chief Financial Officer, with Victor Vescovo, also of Insight, serving as Chief Operating Officer. Beneski commented that "the partnership of the existing management team's expertise and relationships, with Insight's financial and strategic capabilities, will provide an extraordinary investment return for our partners and employees."

Insight Equity is a private equity firm that makes investments in strategically viable, middle market, asset intensive companies with significant cash generation potential. The firm leverages over half a century of partner value creation experience and a proven business model to create extraordinary returns for investors. Its headquarters are based in Dallas/Fort Worth, TX.