Share this post

At just over a year old, Sharonville, Ohio-based RelaDyne already has become one of the leading distributors of lubricants, fuels and equipment reliability services to the commercial, industrial and automotive markets in the Midwest and Gulf Coast regions. In an industry shaped by long-term relationships, how is this possible? The answer is simple, President and CEO Larry Stoddard explains. RelaDyne consists of four venerable, family owned distribution businesses that have served their respective markets for decades. They are Oil Distributing Co., Mid-Town Petroleum, The Hurt Co. Inc. and Pumpelly Oil Inc.

Founded in 1982 by the Oehler family, Oil Distributing Co. of Cincinnati markets passenger car motor oil products to the passenger car, heavy duty/transport and industrial market segments throughout Ohio, Indiana and Kentucky. Chicago-based Mid-Town Petroleum has been the premier lubricants distributor to the automotive, commercial and industrial markets of Illinois, Indiana and Wisconsin since 1955. 

Founded by the Hurt family, Hurt Co. Inc. of Houston has distributed lubricant and field products throughout the Gulf Coast for more than five decades. Pumpelly Oil Inc. of Westlake, La., has grown to become one of the largest oil and gas distributors in Louisiana since the Pumpelly family established it in 1937.

Now united under the RelaDyne umbrella, Oil Distributing Co., Mid-Town Petroleum, Hurt Co. Inc. and Pumpelly Oil Inc. are stronger than ever and able to overcome any obstacle presented to them by a challenging economy, Stoddard says. “There is a lot of risk to owning your own business,” he notes. 

“You are restricted by financial resources, people resources and sometimes even fear,” he continues. “But when you join together and spread the risk, you gain knowledge and new capabilities that enable you to grow your business and create new opportunities for your associates.”

Not Your Average Rollup

The formation of RelaDyne was a traditional private equity play in the sense that its main investor, AEA Investors LP, noticed there was not a lot of consolidation in that industry and saw an opportunity. “The theory was if we could integrate and develop the most customer-capable lubricants distributor in the United States, there would be a financial opportunity not only for the investors, but for the employees to grow and develop,” Stoddard states.

Yet RelaDyne is different from a typical rollup, he asserts. “A lot of those groups rollup the balance sheets, restructure the financing and then sell them – not really creating value,” he says. “This is purely an operational and opportunistic play. It’s about recruiting, developing and training our people to broaden our base and become the preferred lubricant marketer for our vendors and our customers.” 

Another unique factor to RelaDyne’s approach is its decision to give the individuals who ran the four companies functional roles in the new organization. Doug Oehler, former president of Oil Distributing Co., is executive vice president of distribution at RelaDyne, and Dan Oehler, former vice president of sales, is RelaDyne’s vice president of sales and marketing. Jeff Hart, former president of Mid-Town Petroleum, leads RelaDyne’s business development initiatives. 

The Hurt Co.’s former president and CEO, Jay Hurt, serves as RelaDyne’s executive vice president of field reliability management from his base in Houston. Glenn Pumpelly, former president of Pumpelly Oil, is the general manager for RelaDyne’s Gulf Coast region. 

“They bring great credibility and knowledge to the business that a lot of these rollups or financial plays don’t acknowledge,” Stoddard says.

“The original owners work very well as a team and have become very good and trusted friends of each other,” he adds. “It can be a difficult transition to make, one that is very unselfish, but I’m proud of them for making that transition and for doing it positively and progressively. That’s been helpful for our associate base because they see that the owners are still here and are happy in this environment.” 

Sticking to a Strategic Plan

The upper Midwest and Gulf Coast constitute more than 50 percent of the lubrication usage in the United States.

“Geographically, that’s why we started in those areas,” Stoddard says, “to fish where the fish are and grow in the most robust areas of the market. We are up north and down south, and we want to create opportunities to find synergies and fill that gap in between.” 

The idea behind the amalgamation of RelaDyne’s four main companies as well as their “tuck-ins” – i.e. smaller companies that were integrated into the four existing entities – is to cross-functionalize the capabilities of each individual company and spread them to markets where they previously didn’t have those capabilities, all while staying within the same geographical reach, he explains. 

“I think it’s important to distinguish that we aren’t buying companies willy-nilly to get our scale larger,” Stoddard says. “You have to have a strategic outlook and the discipline to stay with it. 

“We are looking for opportunities that fit geographically as well as from a personnel standpoint,” he explains. “The barometer investors have to measure by is ‘Did you keep the most important asset that you purchased?’ And the most important constituencies in our operation are our people and our customers.”

Stoddard describes RelaDyne’s overall strategy for success as similar to the stability of a three-legged stool. 

“We have arguably some of the most influential and trusted people in the business from these four companies, which bring a lot of industry knowledge and credibility,” he states. “We brought in the most seasoned private equity companies. And we have professional management who has integrated and grown other organizations far beyond the scope and scale of what we’re trying to grow here. 

“The combination of these three factors gives us the opportunity to be a successful company for our vendors, customers and associates,” Stoddard continues. “This approach has worked well for us. We are in different stages of talks with a lot of folks and expect to be able to announce some nice platform acquisitions over the next six months.”