M&A activity snapshot
Retail propane is fragmented and flat, which is why it consolidates by acquisition. The ten largest retailers account for approximately 35% of total U.S. retail propane sales, with the rest split among thousands of smaller local independents and farm co-ops. Volume does not grow on its own: U.S. retail sales were 8.995 billion gallons in 2023, close to the ten-year average of 9.04 billion.
Public acquirers keep buying. Star Group, a heating oil and propane distributor, acquired one heating oil business and three propane businesses for approximately $80.5 million in fiscal 2025, after five businesses for $49.4 million in fiscal 2024. Its pace then slowed to one heating oil business for approximately $1.0 million in the nine months to June 30, 2026.
Who is buying
Public propane partnerships. Suburban Propane acquired the propane assets of various retailers in each of its last three fiscal years. Total consideration was $60,061 thousand in fiscal 2025, a figure that also includes non-compete payments and some investments.
Heating oil consolidators. Star Group says heating oil demand is expected to decline, so its ability to maintain or grow the business depends on acquiring other retail distributors. That makes it a steady buyer of Northeast oil dealers adding propane.
Utility-owned propane units. Chesapeake Utilities' Sharp Energy buys small local dealers, such as J.T. Lee and Son's in Cape Fear, North Carolina, for $3.9 million.
Buyers that have pulled back. Superior Plus bought Kamps Propane for $240 million and Quarles Petroleum's retail propane and refined fuels assets for $144 million in 2022, then slowed acquisitions. AmeriGas, the largest retail distributor by volume, completed the sale of its Hawaii propane business in September 2025.
What buyers look for
Gallons and customer count. Small-deal disclosures are framed in gallons and customers, not EBITDA. Sharp's J.T. Lee purchase added approximately 3,000 customers and approximately 800,000 gallons of propane annually.
Tank ownership. Suburban owns a significant portion of the storage tanks on its customers' premises, as is common in propane. Many states bar anyone but the tank owner or supplier from filling it; North Carolina makes it unlawful for any person other than the supplier or owner to fill the system without the supplier's consent. Owned tanks keep customers from switching. Suburban notes that its fuel oil customers, unlike its propane customers, generally own their own tanks, which makes them easier to lose.
Retention and delivery method. Buyers ask for gross gains, gross losses and net attrition by year. Star reports net attrition of 4.7% in fiscal 2025. Suburban reports that approximately 60% of its residential customers receive propane through automatic delivery, which smooths routing and reduces churn.
Drivers. Suburban describes an industry shortage of qualified drivers and technicians. Drivers need CDL tank vehicle and hazardous materials endorsements, so a stable, licensed driver roster is part of what a buyer is paying for.
What makes a strong company
The dealers that sell most easily typically show:
- A high share of customers on company-owned tanks and automatic or keep-full delivery.
- Gross customer losses tracked by year and below industry norms; Star's 13.5% gross losses in fiscal 2025 is one public reference point.
- Gallons per residential account documented; PERC reported a national average of 407 gallons per residential account in 2023.
- Bulk storage, bobtails and cargo tanks maintained to DOT rules, which incorporate NFPA 58 for container safety devices.
- A propane-heavy mix if the business also sells heating oil, since oil-heated households are shrinking.
- Commercial, agricultural and autogas accounts that reduce dependence on residential heating weather.
Valuation and deal structure
No public data provider reports an EBITDA multiple for small propane or heating oil dealers, and the filings below disclose prices and gallons without target EBITDA. The verifiable reference points are per-gallon prices, by Axia's arithmetic:
- Sharp / J.T. Lee and Son's. $3.9 million for approximately 800,000 annual gallons, about $4.88 per gallon and $1,300 per customer, Axia's arithmetic.
- Star Group, fiscal 2025. $80.5 million for four businesses that sold 15,412 thousand gallons in the prior 12 months, about $5.22 per gallon, Axia's arithmetic. Its fiscal 2024 deals worked out to about $1.98 per gallon, Axia's arithmetic, from $49.4 million for businesses that sold 24,944 thousand gallons.
That spread shows why per-gallon rules of thumb mislead: product mix (propane versus heating oil versus motor fuel), owned tanks, real estate and trucks all change what a gallon is worth. Star's filing allocates its fiscal 2025 price to $38.7 million of intangible assets, $17.7 million of goodwill and $25.2 million of fixed assets, so customer lists and equipment carry most of the value.
Small-dealer deals are usually asset purchases with a non-compete from the owner; Suburban's disclosed consideration includes non-compete consideration. Owners can test a range with the valuation tool; Axia does not value businesses or represent sellers.
Outlook
Expect slow, steady consolidation rather than a surge. UGI states that retail propane industry volumes have been flat for several years, with no or modest growth expected. Propane-heated households edged up to 6,348 thousand in 2024 while oil-heated households fell to 4,350 thousand, and about 82% of heating oil households are in the Northeast.
Electrification policy is the main long-term risk: Star notes efforts in several states and municipalities to reduce GHG emissions from fuel-burning systems. Over the next 12-24 months, propane dealers with owned tanks and automatic delivery should still find buyers, while oil-heavy dealers face a narrower buyer set at lower prices.
See the parent Energy & Infrastructure Services M&A overview, and read how trigger events time ownership transitions.