Officials from the two Maine companies signed a purchase and sales agreement Thursday, and the deal is expected to close in several weeks. South Portland-headquartered Dead River will take over Bangor-based Webber’s “retail fuels” divisions, which deal with the propane and oil delivery part of the business. Dead River is the largest distributor of petroleum products in northern New England.
Other parts of the Webber business — including Webber Wholesale Fuels, Webber Energy Gasoline, Webber Energy Transportation, Webber Supply Inc., Sargent, Tyler & West Insurance Agency and Webber’s real estate portfolio — are not part of the deal, said Webber President and CEO Mike Shea.
“This is positive business news, as opposed to a lot of the other business news you read in the papers nowadays,” said Shea.
Shea said Webber has been in the retail heating oil business since 1935. In the last four or five years, the company has faced the economic problems facing the rest of the state and country. On top of that, changes in the energy business such as price volatility and competition from alternative fuels have led to declining sales and tighter margins, he said.
“Webber’s history of high-quality service to customers, high quality employees, offering the best products and the best services we can, has become very difficult at times,” said Shea.
As Webber was doing its strategic planning, the board of directors of the privately held, family company took a hard look at whether to invest further in the retail division or leave it and focus on the other aspects of the business, Shea said.
“Emotionally, for the owners of the company, it was a hard decision,” he said. “But from a business perspective, we’re comfortable because of the other businesses that make up the Webber group of companies — they’re less volatile, easier to budget for.”
Webber has about 400 employees in total, with roughly 225 involved in the retail business. The company has more than 100,000 home heating accounts in Maine and southern New Hampshire.
Webber began looking for a buyer for the retail business last summer, and discussions with Dead River progressed, said Shea.
“Webber Energy is a Maine-based, multigenerational, family business,” said Shea. “Who better to continue our commitment to excellence than Dead River Company, another Maine-based, multigenerational, family business with similar business philosophies?”
Bob Moore, CEO of Dead River, said the deal worked for his company for a variety of reasons.
“In general terms it works for us because the Webber customer base is used to the kind of service we think Dead River excels at,” said Moore.
And, Moore agreed, while Dead River has undergone some of the same economic problems and price pressures as Webber, operating at a larger level — and growing with the new acquisition — gives the company a benefit of economies of scale.
Moore noted that the two businesses’ geographic markets don’t overlap much.
There are 19 different retail locations that Webber now serves with offices, said Moore. Of those 19, Dead River has a presence in five locations. Broadly speaking, Dead River is throughout Aroostook County, while Webber has no presence there. Both are in parts of Washington County, with little overlap. Both are in the Ellsworth and Bangor markets, and in Portland, as well. Webber has a presence in the Rockland/midcoast area, but Dead River doesn’t. Webber has locations throughout York County, while Dead River is basically in Biddeford.
The 225 Webber employees will become Dead River employees, said Moore. The nature of the business requires people to drive trucks, work on service calls and do other tasks, Moore noted, and he anticipated Dead River would keep those workers.
“To serve these customers, these positions have to stay in place,” said Moore. “I see little or no negative employment impact as a result of this.”
For several months after the deal closes, at least, former Webber customers will still be getting oil or propane delivered by trucks with Webber signs on them. Customers should see no difference in prices or service, said Moore, and will call the same numbers to reach their supplier.
“I think for the Webber customers, the transaction will be virtually seamless,” said Moore. “The one thing you don’t want to upset during the transition is customer service.”
Dead River employs roughly 1,100, said Moore. A few hundred are in Dead River’s convenience stores. About 700 of the total work in Maine, the others are in Massachusetts, New Hampshire and Vermont. Moore declined to reveal the number of home heating accounts Dead River holds.
Moore noted the two companies share a history going back to the 1930s.
“If you go back to the early days of these two companies, back to Webber’s founder, Alburney Webber, and Dead River Company’s founder’s son, Curtis Hutchins, you’ll find a friendship as well as respect for the work each man was doing,” said Moore in a statement. “In fact, it was Alburney Webber who approached Curtis Hutchins about purchasing a petroleum bulk storage plant, four gasoline stations and an Esso franchise in Calais in 1936. This business arrangement marked Dead River Company’s entrance into the petroleum business.”