Pennzoil Quaker State, the lubricants business of Shell USA, announced Monday an agreement to sell Jiffy Lube International to an affiliate of middle-market private equity firm Monomoy Capital Partners for $1.3 billion. Kirkland & Ellis provided counsel to Monomoy.
Travis Torrence is head of legal for Shell USA.
“By capitalizing on a strong market opportunity, this divestment allows us to monetize an asset that is not central to Shell’s lubricant’s portfolio in the U.S. and reinvest in opportunities that generate higher returns,” said Machteld de Haan, the London-based energy giant’s president of downstream, renewables and energy.
Shell said Jiffy Lube accounts for about 6.5 percent of its U.S. and Canada lubricants business. Shell will retain Pennzoil Quaker State, Rotella and its other lubricants brands for distribution in the U.S. and Canada. Pennzoil Quaker State also entered a long-term supply agreement with Monomoy, as part of this deal that is expected to close in the second half of this year.
Founded in 1979 and headquartered in Houston, Jiffy Lube operates more than 2,000 franchisees and company-owned and operated service centers across North America. As part of the deal, Monomoy also acquires Premium Velocity Auto, the second-largest Jiffy Lube franchisee, with more than 360 locations in 20 states.
“Few brands have the heritage and scale of Jiffy Lube,” Monomoy Managing Director Lee Mlotek said. “As the original pioneer of the fast oil change, Jiffy Lube reshaped the industry and remains the market leader today. We are incredibly excited to partner with our franchisees to enhance the customer experience and value proposition that has made Jiffy Lube a trusted name for generations.”
Shell, which acquired Jiffy Lube when it bought Pennzoil Quaker State for $1.8 billion in 2002, has about 12,000 branded gas stations serving more than 7 million customers daily. RBC Capital Markets served Monomoy’s exclusive financial advisor for this transaction.