GulfStar Provides Strategic Alternatives to a Niche Industry LeaderTanknology’s Dual Purpose To Serve Fuel Tank Owners and Protect the Environment
In 1988, Tanknology, Inc. (Tanknology) was created to help oil companies and small independent gas station operators navigate new nationwide Environmental Protection Agency (EPA) regulations governing underground fuel storage tanks as well as help them through the testing and upgrade programs necessary to bring their facilities into compliance.
Headquartered in Austin, Texas, Tanknology’s mission is to “serve the evolving needs of fuel storage tank owners by providing the broadest range of testing, inspection and compliance management.”
Tanknology began by developing contamination tests and equipment to measure the structural integrity of underground storage tanks (UST) for fuel. The ultimate goal was to mitigate groundwater pollution, protect drinking water and the environment. Exxon, Shell and Chevron were among its early clients; however, its customer base expanded to incorporate a wide range of businesses across multiple industries that were also affected by those regulations, such as fuel marketers and grocers (7-Eleven), transportation (FedEx), healthcare (Tenet Health) and more.
As state and federal regulations for water quality continued to tighten over the next three decades, the demand for Tanknology’s service offerings grew. To ensure its customers remained compliant, the company created new testing equipment and procedures to meet those ever-changing needs.
Tanknology has become the largest provider of environmental compliance testing and inspection services for retail fuel providers in the United States. The company services more than 50,000 petroleum fueling and storage facilities per year, offers more than 30 compliance-related service offerings and holds 22 patents for leak detection and tank monitoring technology. Internationally, Tanknology licensees span more than 30 countries, providing services to the largest petroleum operators in the world.
“We are pleased to be in a position to help so many companies with their regulatory compliance programs,” said Allen Porter, CEO of Tanknology. “We have served many of them throughout our 30-year history. As regulations continue to change, we plan to be right alongside these clients, developing technological solutions and services to help keep them in compliance.”
As Tanknology continued to expand its service offerings, coupled with the EPA releasing updated and expanded UST regulations – the first major update since 1988 – Tanknology knew it needed to secure a strategic partner to help keep up with the increasing workload. Another key objective of this transaction was to allow the executive shareholders to retain equity in the company while achieving liquidity for the passive owners.
GULFSTAR HELPS TANKNOLOGY REACH GREAT HEIGHTS BY CAPITALIZING ON ITS DOMINANT MARKET POSITION
Tanknology initially met with GulfStar in 2016 to explore options to grow the company or sell, but waited until 2019 to start the process due to unfavorable market conditions. Tanknology ultimately hired GulfStar because of its experience selling environmental services companies with an energy niche.
The GulfStar team positioned Tanknology as a dominant provider in its niche industry segment and approached a targeted list of financial and strategic buyers. One of the potential buyers was Hamilton Robinson Capital Partners LLC (Hamilton Robinson), a private equity firm founded in 1984 to invest directly in privately held commercial and industrial services, niche manufacturing and industrial technology businesses. Based in Stamford, Connecticut, Hamilton Robinson has completed over $1.6 billion in transactions supporting 59 family businesses and corporate divestitures.
After significant interest from several potential buyers, Hamilton Robinson emerged as the best partner to help Tanknology’s executive shareholders reach their growth objectives, while the passive owners achieved 100% liquidity. The deal closed on September 13, 2019.
We look forward to partnering with Hamilton Robinson and providing our customers with the solutions needed to keep up with the constantly evolving regulatory requirements. Our successful outcome was the result of GulfStar’s experienced team that skillfully positioned our company to the market and provided value-added guidance from start to finish.
Allen Porter, CEO of Tanknology
Tanknology was extremely well-received by the buyer universe due to the strategic position of the company in its niche market. Hamilton Robinson checked all the boxes for our client. We especially enjoyed working with the passive owners, executive management and Hamilton Robinson in a very successful transaction for all stakeholders.
Kent Kahle, Managing Director and Co-Founder of GulfStar
GulfStar advantages in a majority recapitalization
• Ability to help structure transactions to meet owners’ objectives
• Identifying the most salient company attributes and market positioning that
• Ongoing guidance and advocacy beyond the initial letter of intent
• Ability to anticipate and mitigate potential challenges proactively
The GulfStar Team
• Kent Kahle, Managing Director
• Jon Sanfelippo, Associate
• Jay Lee, Analyst