Eighteen area quick-change lube stations have been purchased by an out-of-state company that intends to upgrade the locations and market them aggressively.
That could mean some stiff competition for the area's hometown Jiffy Lube franchise operator, the family that owns and operates Hoffman's Car Wash Inc.
In a deal that closed in late June, Galena Associates LLC, a Tolland, Conn., limited-liability company consisting of two brothers, Michael Ferri and Paul John Ferri, purchased eight company-owned Valvoline Instant Oil Change locations in the area.
At the same time, Galena purchased 10 Quick Lube Oil Centers Ltd. stations in the Capital Region and one in Kingston. It also purchased six Pit Stop Inc. stations in Westchester County.
The total cost for the New York acquisitions was about $15 million.
The outlets will be operated by Galena as Valvoline Instant Oil Change locations.
A second limited-liability company in which the brothers are general managing partners, Roaring Brook LLC, also of Tolland, owns the real estate on which the stations sit.
With the purchases, Galena Associates will operate 40 Valvoline stores in New York and Connecticut as the regional franchisee of Valvoline Instant Oil Change Franchising Inc., a 550-outlet chain of franchise and company-owned stores based in Lexington, Ky.
Asked if he wanted to corner the quick-lube market, Michael Ferri, said, "We have cornered the Valvoline market."
He said the move was prompted by Valvoline's decision to identify markets in which the company can grow aggressively by consolidating locations under one operator who can offer a consistent, positive customer experience.
A large organization also affords employees opportunities for growth, thus fostering long-term commitment from quality individuals, he added.
Such a big expansion in Galena's holdings was not planned, but Ferri said the opportunity to purchase the Quick Lube and Pit Stop stations came to the company at the same time.
Because independent lube chains are not common and are not commonly for sale, the Ferri brothers decided to move on the deals.
Financing was provided by FFCA Acquisition Corp. of Scottsdale, Ariz.
The Quick Lube Oil Centers had been operated as a private local company headquartered in Latham. Company president Craig Shamlian did not return calls seeking comment on the sale.
Despite the fact that some of the Valvoline and Quick Lube locations are near to each other--in Clifton Park they are essentially neighbors, for instance--there will be no store closings, said Eileen Kaczor, director of marketing for Galena Associates.
All locations will be revamped, with customer comfort upgrades including better restroom facilities. Also planned are cosmetic improvements, and increased safety features and benefit plans for employees.
Kaczor said the name recognition of Valvoline and the company's signature program, Maximum Vehicle Performance, provide an excellent basis for marketing. MVP is a computerized record of car maintenance that can be accessed at any Valvoline location nationwide, using a swipe card or via the Internet.
The sudden consolidation of competition under one operator has not fazed the area's Jiffy Lube franchisee, however. Doug Geier, general manager of the eight Jiffy Lube locations, says he is taking a wait-and-see attitude.
As the move by Galena will not add any new quick-lube stores to the market, the pie will not be sliced smaller by more operators.
Both companies include car washes with oil changes, limiting that area of competition. Success in attracting customers may be determined by marketing.
"Valvoline has not been known for their large marketing campaign," Geier said. "If they do not [launch an aggressive campaign], there is no need for me to spend money on a big marketing [plan]."
The Hoffman family, led by Thomas Hoffman Sr., purchased a franchise for Jiffy Lube International Inc. of Houston in May 1996 to add an extra element of stability to its Colonie-based seasonal car wash business.