September 2022 Issue Highlights

VALVOLINE TO BE ACQUIRED BY SAUDI ARAMCO

LEXINGTON, KY. —Valvoline Inc. has signed a deal to be acquired by the Saudi Arabian Oil Company (Aramco) for $2.65 billion in cash. The sale was announced August 1.

Included in the sale is Valvoline's Global Products business including its branded automotive, commercial and industrial lubricants, and automotive chemicals. Aramco will own the Valvoline brand for all product uses globally.

Valvoline will continue to own the Valvoline brand for all retail services globally —excluding China and certain countries in the Middle East and North Africa. In addition, Valvoline agreed to a long-term supply agreement with Aramco and will procure all its motor oil and related products from Aramco's Valvoline Global products.

The two companies said they will "expand their partnership to ensure that Valvoline's iconic brand is managed in a consistent and holistic manner."

Valvoline CEO Sam Mitchell will continue to serve as the CEO of Valvoline, operating solely as a retail services business, and Lori Flees will serve as president.

"Valvoline's global products business fits perfectly with Aramco's growth strategy for lubricants as it will leverage our global base oils production, contribute to our R&D capabilities and strengthen our existing relationships with OEMs," stated Mohammed Al Qahtani, Aramco senior vice president of Downstream, announcing the deal. "Valvoline's brand strength and global recognition will continue to be developed and extended under Aramco's stewardship. We are also very excited to have the outstanding people of VGP join the Aramco family as we continue to execute on our ambitious strategy."

With the sale of the Global Products division, Valvoline will now focus on operating and growing its automotive service business and Valvoline Instant Oil Change network. The company has said it will invest some of the proceeds from the $2.65 billion sale into its retail services business, looking to expand its auto maintenance offerings to EV owners as well as OEMs and fleets.

Valvoline said it will also have "an increased emphasis on franchisee growth."

"The sale of Global Products will represent the successful outcome of our strategy to unlock the full, long-term value of our strong but differentiated Retail Services and Global Products businesses," stated Valvoline CEO Sam Mitchell. "We have built two leading businesses that are well-positioned for continued success as they pursue their individual strategic priorities."

Completion of the transaction is subject to customary closing conditions and regulatory approvals. The sale is targeted to close in late calendar year 2022 or early 2023.

SMOKER FRIENDLY ACQUIRES TOBACCO SUPERSTORES

BOULDER, CO. —Smoker Friendly has acquired Tobacco Superstores of Forrest City, AR. The purchase price for the sale, announced in August, was not disclosed.

Included in the deal are 79 Tobacco Superstores in Arkansas, Tennessee, Mississippi, Missouri, and Kentucky. They will be rebranded Smoker Friendly and introduce the SF cigarette and tobacco product lines to the TSS consumers.

"We've known Joe Marelle for many years, so when he reached out expressing a desire to exit the business, we jumped at the opportunity this transaction presented," said Terry Gallagher, Jr., CEO of Smoker Friendly. "We are very excited about the stores and their great team joining Smoker Friendly and expanding our corporate store footprint in these great southern states."

Gallagher continued, "This is our largest acquisition to date and I'm very proud of our team and the many hours expended to close this deal. We are actively pursuing additional acquisitions and continue to be bullish on growth opportunities."

Announcing the deal, Joe Marelle owner of the Tobacco Superstores said, "I could not be prouder of what has transpired over the past 11 years and where this has led. Tobacco Superstores consists of a great and proud group of people. Now, TSS can become part of something bigger.

"I truly believe in the Gallagher family and their vision. I have had the honor of knowing Terry for 11 years, but have developed a deeper appreciation of his entire operation through working with others like his brother Dan. This is a special transaction that will lead to great things."

This is the fifth acquisition Smoker Friendly has completed in the last two years, bringing the Boulder-based company's store count to 260, operating in 12 states.

Smoker Friendly's parent company TCS is the largest licensee of Smoker Friendly International, and the largest tobacco store retailer in the United States, operating a mix of tobacco stores, cigar lounges, liquor stores and fueling locations under the Smoker Friendly, Tobacco Depot, Smoke 'N Go, Havana Manor and Gasamat brands.