Petroleum Products Corp., based in Harrisburg, Pa., has seen at least one round of bids, with another round ongoing, sources tell OPIS. The sale is being handled by investment bank Credit Suisse.

Owned and run by its chairman, John Arnold, Petroleum Products is one of the dominant logistics companies in Pennsylvania and also boasts a large wholesale refined products business. The precise motivation for the sale isn’t known, but as OPIS has reported, there are numerous large refiners or master limited partnerships in the logistics segment looking to pursue further growth.

PPC sells about 43 million bbl of products each year, about 23 million bbl of which are sold via third parties. PPC has a total storage capacity of close to 4 million bbl at a dozen terminals.

PPC is a large wholesaler of gasoline, diesel and other products in the state, but economics for the purchase-and-resell class of trade have not been favorable in recent years, thanks mostly to aggressive refinery sales prices in the region. A lubes division owned by the company is reportedly not part of the sale.

The terminals — all in Pennsylvania — range in size from 150,000 barrels to over 500,000 barrels and are located in Allentown, Altoona, Coraopolis, Dupont, Pittsburgh, Neville Island, Harrisburg, Northumberland, Sinking Springs, Mechanicsburg, Highspire and Lancaster. A terminal owned by PPC in Williamsport is in the process of being closed, OPIS is told, so it is not part of the package. In addition to operating proprietary terminal in Coraopolis, PPC leases
an additional terminal there from Buckeye Pipeline.

The two biggest PPC facilities are in Harrisburg and Coraopolis, with each boasting in excess of 500,000 barrels of capacity. Sources tell OPIS that PPC has its own unit train operation that brings ethanol directly from Chicago and the Midwest into its western Pennsylvania locations. It can also take barge deliveries from Midwestern refineries to a large facility near Pittsburgh.

Some lofty bids are likely given the high valuations that MLPs have had for strategic terminals. Some experts believe the annual EBITDA could be in the $100 million neighborhood, so estimates of the value of the company range from $600 million all the way up to about $1 billion, based on recent multiples.

Buckeye is believed to be one of the front-runners for the package, although spirited bids may also come from Energy Transfer Partners (ETP) Sunoco Logistics unit. There is speculation that Marathon might view the terminal business as a platform for further expansion in a state that may be part of its core area, thanks to its 2014 purchase of Hess’ retail business.

Pennsylvania gasoline retailer Sheetz is believed to be the largest gasoline throughput partner at the PPC terminals, along with Belle Vernon-based Guttman Energy. But about a dozen other throughput partners use PPC facilities. The company’s assets are also strategic for ethanol and biodiesel blending in the state.

The facilities are believed to be in great shape, without the need of new capital expenditures for upgrades.