Top brass at Sprague and parent company Axel Johnson in June formed entities that will own and operate the supply and marketing businesses that were traditionally conducted by Sprague Energy. On Wednesday, an S-1 statement was filed for a new entity, Sprague Resources LP.   
That company will operate as a master limited partnership and Axel Johnson will still retain control through its general partner ownership. There is no date yet for the public offering but Sprague Resources hopes to raise as much as $165 million in the process.   
Leading underwriters for the eventual IPO include Barclays Capital and J.P. Morgan. Most importantly, documents suggest that Sprague Resources will aggressively look at expanding, through purchases of additional terminals or marketing/distribution businesses in New York, New England, and perhaps in some adjacent states. If all goes well, Sprague Resources will have a separate acquisition credit line of $200 million that under certain conditions can be raised by $100 million to $300 million in total. Observers agree that is a tidy war chest that can be tapped for expansion. An additional working capital facility of up to $800 million is provided for in the prospectus.   
Financial statements that are included in the 294-page document note that Sprague has seen annual net income in the last three years that ranges from $15.7 million to about $21.5 million.   The company will be structured as a Delaware limited partnership. It currently consists of a network of 15 refined products terminals in the northeast with just under 8 million bbl of storage as well as 1.5 million square feet of materials handling capacity. Sprague also has access to some 50 refined products terminals via exchanges or throughputs in the northeast.  Three of the terminals it owns — in South Portland and Searsport, Maine; and Newington, N.H. — have over 1 million bbl storage each.   
The company’s balance sheet is organized into three business segments: refined products; natural gas; and materials handling. In 2010, Sprague sold approximately 1.3 billion gallons of refined products and those sales accounted for about 73% of gross margins. Natural gas is purchased and sold to more than 900 commercial and industrial customers in the northeast, and that segment accounted for about 5% of gross margin. The materials segment differs from energy in that Sprague doesn’t take title to the products. It handles items that include asphalt, clay slurry, gypsum, salt, caustic soda and heavy equipment.