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Begun with a handshake, deal fueled growth for Rhoads Energy

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Michael DeBerdine III, president and CEO of Lancaster-based Rhoads Energy, and Jennifer Goldbach, the company's vice president of business development.
Michael DeBerdine III, president and CEO of Lancaster-based Rhoads Energy, and Jennifer Goldbach, the company's vice president of business development. - (Photo / )

When assets of Worley & Obetz came up for auction in federal bankruptcy court on Sept. 17, among the potential buyers were Diesel Direct and Rhoads Energy.

The court ultimately awarded the assets, divided into 18 lots, to Boston-based Diesel Direct, which made a bid of $10.7 million.

Diesel Direct turned around and sold four of the lots to Rhoads Energy based on a handshake deal with Rhoads president and CEO Michael DeBerdine III. The four lots comprised Worley & Obetz’s propane division, its HVAC installation and maintenance division, and two smaller lots – all based in Worley & Obetz’s former territory of Lancaster County and surrounding areas.

The deal — whose terms were undisclosed — resulted in Lancaster-based Rhoads effectively doubling the value of its propane business, according to DeBerdine. But it took more than just showing up at an auction to win over the clients Worley & Obetz left behind.

With the handshake deal in play, DeBerdine and his staff began to plan a transition process with the goal of bringing former Worley & Obetz clients into the Rhoads fold.

For the eleven days between the handshake and the sale’s close on Sept. 28, Rhoads prepared for the acquisition.

A team led by Jennifer Goldbach, vice president of business development at Rhoads, developed an outreach campaign to former Worley & Obetz customers. Using the customer list, which was received by Rhoads shortly after the auction, they mapped out more than 2,800 residential and commercial propane tanks throughout the midstate.

As soon as the sale closed on Sept. 28, Goldbach dispatched 20 “street teams” of two people each to visit customer properties, confirm the location of each propane tank and determine if the customer wanted to continue service with Rhoads.

One former Worley & Obetz customer, Laurie Yost of Elizabethtown, said the face-to-face interaction with a Rhoads representative put her at ease after the surprise shutdown of Worley & Obetz in June. Yost owned two businesses at the time — a dog kennel and a consignment shop — as well as her home, totaling three accounts with Worley & Obetz. Yost has since sold the consignment shop and is in the process of opening up another kennel.

“A Rhoads rep walked into my store, gave us the initial pricing, and followed up with me later. They have been wonderful to work with,” Yost said.

In addition to in-person visits, Goldbach and her team drafted letters as well as social media posts and press releases to inform former Worley & Obetz customers that their accounts would be taken over by Rhoads if they chose to continue service.

Sorting through tanks

In the months after the bankruptcy in June, many former Worley & Obetz customers chose to sign with competitors like York-based Shipley Energy, which picked up about 200 to 300 customers, according to Steve Downey, Shipley’s vice president of marketing. Shipley also employed about 20 former Worley & Obetz staff, including former executive Seth Obetz, who created a division within Shipley called Seth Energy.

But because the tanks on customers’ properties were still technically owned by the bankruptcy trustee overseeing the Worley & Obetz case, they could not be serviced until the sale went through. Competitors like Shipley that took over former Worley accounts often had to place a new tank next to the old one, leaving the old tank unhooked and idle.

In other cases, competitors unhooked Worley & Obetz’s propane tanks and transported them to their own storage yards.

Rhoads is in the process of collecting each of the old Worley & Obetz propane tanks – both those on competitors’ facilities and those on customers’ properties – to be stored on a Lancaster County property owned by Rhoads. Each of the tanks will then be assessed to determine which will be sold and which will be kept and reused by new customers.

Some customers chose to wait and were pleased when Rhoads called to see if they wanted to continue service, said Goldbach.

In some cases, customers had made deposits for new equipment or budget payments on their fuel accounts — some running into several thousands of dollars — that subsequently disappeared when Worley & Obetz declared bankruptcy in June.

Rhoads also accounted for former Worley & Obetz customers who had service contracts that Worley & Obetz was unable to fill after its bankruptcy. Rhoads extended contracts on a case-by-case basis.

“We told customers, ‘We will cover a basic service contract to you as a gesture of some consideration for what you lost.’ We felt it was the right thing to do,” Goldbach said.

Rhoads also added about 14 people to its staff of more than 100, including technicians, managers and customer service representatives across multiple counties, including approximately 10 former Worley & Obetz employees.

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Mariah Chuprinski

Mariah Chuprinski

Mariah Chuprinski is the special projects editor at CPBJ. Email her at mchuprinski@cpbj.com.

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