Ferrellgas

Ferrellgas Partners, L.P.

Company type	Public partnership
Industry	Propane distribution
Predecessor	A.C. Ferrell Butane Gas Company
Founded	1939
Founder	A.C. Ferrell
Headquarters	Liberty, Missouri , United States
Area served	United States (all 50 states and District of Columbia), Puerto Rico (Blue Rhino outlets)
Key people	James E. Ferrell (Chairman)
Products	Propane, propane tank exchanges (Blue Rhino)

Ferrellgas Partners, L.P. is a U.S.-based propane provider established in 1939 by A.C. Ferrell in Atchison, Kansas. The company, which has its main office in Liberty, Missouri, serves customers across the entire country.

History

Originally launched as A.C. Ferrell Butane Gas Company, the enterprise expanded throughout and following World War II by retailing gas heaters and floor furnaces from its Atchison location. In 1947, A.C. Ferrell introduced a bulk plant to distribute bottled gas within the local area. After the passing of Mabel Ferrell in 1952, the firm diversified into selling furniture and televisions but encountered difficulties, including a flood in 1958 that necessitated relocating operations to Missouri.

James Ferrell, son of A.C. Ferrell and the current Chairman, revitalized the company in 1965 when it had diminished to just four employees concentrating exclusively on propane. He rebranded it as Ferrellgas and initiated growth throughout the Midwest beginning with acquiring a dealer in Rushville, Missouri in 1968. The following decade saw further expansion through acquisitions and wholesale ventures, capitalizing on the energy crises during the 1970s.

During this era, the headquarters relocated from Platte City to Kearney, Missouri. In 1977, Ferrellgas established Ferrell North America, a division dedicated to propane and feedstock distribution. New headquarters buildings were constructed in Liberty, Missouri in 1981 and 1983, remaining there until executive offices moved to Overland Park, Kansas in 2004. Amid the COVID-19 pandemic in 2020, corporate headquarters returned to Liberty.

Acquisition of Buckeye Gas Products Company transforms Ferrellgas into a national enterprise

During the late 1970s and early 1980s, Buckeye Gas Products Company was a significant propane retailer experiencing rapid growth alongside Ferrellgas. Established in 1886 by Standard Oil, Buckeye built an expansive pipeline system across the Midwest and Mid-Atlantic regions. After being purchased by the Pennsylvania Railroad in 1964, Buckeye remained profitable even as its parent company declared bankruptcy in 1971. Throughout the 1970s, Buckeye invested substantially in infrastructure and expanded into New England by acquiring Jet Lines, Inc. in 1977.

In 1986, Penn Central sought to divest Buckeye through a master limited partnership but ultimately separated the company’s pipeline and propane divisions for sale following tepid market interest. In 1984, Andy Levison—a Wall Street financier who would later join Ferrellgas’s Board—alerted James Ferrell that Buckeye’s propane subsidiary was available for approximately $200 million. This purchase elevated Ferrellgas from a regional operator to the third largest retail propane marketer nationwide.

Initial Public Offering

After acquiring Buckeye, Ferrellgas streamlined its operations and pursued geographic expansion throughout the late 1980s and early 1990s. The November 1989 acquisition of DuPane Gas Service in Rhode Island marked the company’s initial entry into the competitive Northeast region, bringing in 2,600 customers and an annual propane volume of 1.7 million gallons. From 1990 to 1991, Ferrellgas completed a series of 14 acquisitions, including United Cities Propane Gas in Georgia with 3.9 million gallons and Fessler Mill & Hardware in Wisconsin with 86,000 gallons. These purchases notably enhanced its footprint in New Jersey and Rhode Island, reinforcing its Northeast market presence.

To finance continued growth and acquisitions, James Ferrell established a Master Limited Partnership (MLP). In June 1994, Ferrellgas Partners, L.P. launched partnership units on the New York Stock Exchange under the ticker FGP, securing vital capital resources for further expansion.

Establishment of Employee Stock Ownership Plan (ESOP)

In 1998, investment bank Goldman Sachs recommended to James Ferrell a retirement strategy involving the sale of his ownership stake to employees through a leveraged Employee Stock Ownership Plan (ESOP). This approach offered tax advantages by promoting widespread employee ownership. On July 18, 1998, thousands of employees across 35 nationwide meetings were informed about their new ownership roles within the ESOP during a videotaped presentation led by Ferrell. The ESOP remains a fundamental element of Ferrellgas’s corporate identity.

Acquisition-driven growth continued into the new millennium. On December 1, 2002, Ferrellgas purchased ProAm, Inc.’s propane business—the nation’s 17th largest propane retailer—for $25.6 million plus a $10 million deferred payment. ProAm operated 57 locations across seven states, primarily serving approximately 70,000 customers in Georgia and Texas. Further expansion occurred in late 2003 and early 2004 with the acquisitions of Aeropres Propane of Louisiana and Suburban Propane Partners’ operations spanning Texas, Oklahoma, Kansas, and Missouri. These deals contributed an additional volume of 10 million gallons from Aeropres and 13 million gallons from Suburban while introducing Ferrellgas to new markets such as Norman, Oklahoma, and Austin, Texas.

Merger Announcement with Blue Rhino

On February 9, 2004, Ferrellgas finalized a significant merger with Blue Rhino Corporation, the leading U.S. supplier of propane through portable tank exchanges. Valued at $340 million, the transaction involved acquiring Blue Rhino shares traded on Nasdaq under the symbol RINO. James Ferrell emphasized that tank exchange represented the fastest-growing segment within retail propane at that time. In 2004, Blue Rhino operated an extensive network of approximately 29,000 exchange locations nationwide—a figure that has since grown to exceed 50,000.

Founded in 1994 and based in Winston-Salem, North Carolina, Blue Rhino is widely recognized for exchanging standard 20-pound barbecue grill tanks but also markets other product lines. Its acquisition of Global Sourcing in 2000 established it as the world’s largest barbecue grill supplier with distribution across North America, South America, Europe, and Asia. Global Sourcing’s product lineup included Uniflame-branded grills alongside outdoor living items marketed under private labels such as SkeeterVac and Endless Summer. In August 2018, Ferrellgas divested its global sourcing division.

In September 2009, James E. Ferrell resigned as CEO and appointed Steve Wambold—who had served as company president and COO since 2005—as his successor. Following Wambold’s resignation amid financial difficulties stemming from two challenging acquisitions that significantly increased company debt, Ferrell returned as Interim President and CEO in September 2016.

Explosion at Blue Rhino Propane Facility

On the evening of July 29, 2013, at approximately 10:30 p.m. EDT, a fire ignited at the Blue Rhino propane facility in Tavares, Florida, which is owned by Ferrellgas. This incident triggered a series of explosions that persisted over the next hour and extended into the early hours of the following day. The site housed roughly 53,000 propane cylinders along with several sizable storage tanks. The event resulted in injuries to eight employees, with some sustaining severe wounds.

Ferrellgas Expands into Midstream Sector

Ferrellgas entered the midstream market on May 1, 2014, through the acquisition of Sable Environmental, LLC and an affiliated company for $124.7 million. Sable specializes in fluid logistics within the Eagle Ford Shale area of southern Texas. Later that year, on September 2, Ferrellgas broadened this division by acquiring two salt water disposal wells from C&E Production in the same region, raising its total wells there to eight. After CEO James E. Ferrell returned from retirement in 2016, the company shifted focus back to its primary propane operations by divesting assets unrelated to propane, including those linked to Sable Environmental.

Bridger Logistics Acquisition and Subsequent Divestiture

In June 2015, Ferrellgas expanded its midstream capabilities by purchasing Bridger Logistics LLC for around $837.5 million. Nevertheless, by 2018, Ferrellgas began selling off these holdings, including Bridger Energy LLC and tank rail cars owned by Bridger Rail Shipping LLC. The divestiture was finalized in August 2018 with the sale of the remaining Bridger operations and the global sourcing division.

Ownership

Although publicly traded since 1994, control remains significantly influenced by the Ferrell family. James E. Ferrell holds the position of chairman and has served twice as president of the World LP Gas Association. As of October 31, 2017, he possessed 4,763,475 common units in Ferrellgas Partners, L.P., while employees collectively owned 22,529,361 units through an employee stock ownership plan. Following a financial restructuring completed in 2021, there are now approximately 4.9 million Class A units outstanding.

On December 30, 2019, Ferrellgas voluntarily withdrew from the New York Stock Exchange after its share price dropped below the $1.00 minimum listing threshold and transitioned to trading on the OTCQB Pink Sheet under the ticker FGPR. After successfully emerging from a prepackaged Chapter 11 bankruptcy restructuring in 2021, Ferrellgas reported net income of $148.86 million for fiscal year 2022—the first profitable year since 2015.

Locations

According to its September 30, 2022 Form 10-K filing, Ferrellgas operates a network of 795 propane distribution sites throughout all fifty U.S. states and the District of Columbia. Additionally, Blue Rhino retail outlets are present in Puerto Rico.