A small petroleum wholesaler and operator of self-service gas stations will become the new owner of a Long Beach oil company salvaged from the crumbling U.S. empire of Saudi Arabian businessman and arms dealer Adnan Khashoggi.
John D. Castellucci becomes the major stockholder and chairman of Edgington Oil Co. today. The company, which primarily makes asphalt, was purchased from Salt Lake City-based Triad America Corp., Khashoggi's private investment firm that filed for protection under U.S. bankruptcy laws in January, 1987. Edgington, however, remained profitable and was put up for sale.
Castellucci paid $52.5 million in cash for the 46-year-old company and also assumed $22 million in debt. Under the agreement, Edgington will sell its Signal Hill Product Distribution Center to Arco Terminal Services for $25.5 million.
Edgington, which has annual sales of about $400 million, claims a leading 35% share of asphalt sales in Southern California. Its Arizona subsidiary, Sahuaro Petroleum & Asphalt Co., claims a 60% share in Arizona.
The recent closing of two other major asphalt makers in Southern California and strong demand from road builders for asphalt puts Edgington in a good position, industry experts say. The price of asphalt, as well as other petroleum-based products, has fallen in recent years, making it more attractive to construction companies and road builders.
"The demand has picked up again because the price has dropped," said James McDonald, an oil industry consultant based in San Marino. "That is the right business to be in right now."
Some in the industry say Castellucci might take advantage of the strong demand for asphalt and resell Edgington to a higher bidder. But Kenneth Roberts, Castellucci's lawyer, said there were no plans to resell the company. Castellucci was not available for comment.
Most of Edgington's top executives will remain with the company. Archie H. Humphrey, who has served as acting president, will become Edgington's president and chief executive. Humphrey worked for two years at a now defunct oil company, La Mesa Energy, owned by Castellucci.