Service Type: M&A, Recapitalization
Client: Hino Gas Sales, Inc. (“Hino”)
Client Description: Hino Gas Sales, Inc.
In 1963, Alejandro Hinojosa, Sr. founded Hinogas by purchasing one propane bobtail truck and delivering propane to mostly rural customers in Cameron and Willacy Counties of South Texas. Mr. Hinojosa did everything himself in those days: he was the mechanic, dispatcher, accountant, receptionist, service technician and driver, delivering the product to hundreds of homes. Over time, Alejandro Sr. began to receive a reputation as a hard-working, reliable and honest person who would always be there no matter the weather conditions to dependably deliver propane gas. Honoring and upholding the same values as Alejandro Sr., Alex Hinojosa Jr. plans to continue the successful growth of the Company that his father built after refinancing the Company and purchasing all the outstanding shares.
- Alejandro Hinojosa, Sr., passed away in 2016 leaving the shares of the Company to his wife. Mrs. Hinojosa had worked in the Company for over 30 years as well, and entertained retirement in 2018. Mrs. Hinojosa did not want to sell the Company to an outsider, yet she also wanted to obtain a fair market value for the enterprise. She and Alex Hinojosa, Jr. approached Corner Capital to facilitate a family ownership transition.
- Through Corner Capital’s expertise and prior projects in the propane industry, Corner Capital performed an independent, estimated Fair Market Valuation of the Company.
- Subsequently, Corner Capital facilitated negotiations between Mrs. Hinojosa and her son Alex Jr. to arrive at a valuation agreeable to both parties.
- Corner Capital then developed several structures which would facilitate the transition, considering cash compensation, real estate assets, debt financing, and equipment financing.
- Corner Capital created a structure that satisfied Mrs. Hinojosa that her retirement and cash needs were sufficient, while also obtaining debt financing through the Company’s assets. Corner Capital also structured the real estate assets of the Company such that both parties were able to utilize those assets as part of the transition purchase price.
- The Company was successfully transition to Alex Hinojosa, Jr. in May 2019, and thus able to carry on its family tradition of excellent service and long-term reputation in the South Texas markets.
- The Company has new banking relationships which will facilitate its continued growth plans into new markets and energy channels.