Energy Transition Opportunities: D&H United Fueling Solutions

What makes fuel station services an appealing segment to buyers and investors?

Jones: The U.S. fuel station services and equipment market is large, with very limited cyclicality to economic cycles. Most of the work is non-discretionary, such as break-fix maintenance on pumps where there is a high cost of downtime, compliance testing requirements, and replacement of end-of-life products.  

Gillam: Long-term growth is underpinned by several positive indicators: a stable number of fuel stations, a shift towards larger stations with more dispensers, continued growth in total miles traveled, relatively consistent fuel consumption and new compliance requirements. There is also a significant opportunity surrounding the required replacement of underground storage tanks that will drive additional growth over the next decade.  

Semple: The EV transition presents real opportunity for both existing fuel station services businesses and new entrants. It is going to be a multi-decade process that is expected to spur market growth for the next 20+ years. Level 3/DC chargers cost significantly more to install, have a similar level of annual maintenance spend and may have a shorter lifespan than a fuel dispenser. While EV charging infrastructure is being rapidly deployed, the industry has barely scaled up to deliver the actual installation of EV charging, let alone ongoing maintenance and repair needs. In the meantime, the need to maintain all the gasoline-based fuel station infrastructure is enduring.  

Gillam: There are also many components of the EV charging infrastructure that are the same as legacy fueling infrastructure, such as credit card payment and communications systems. These elements of the EV charging infrastructure will require the same types of services and maintenance that the legacy infrastructure requires, which bodes well for businesses that service these infrastructure elements today.  

Jones: Service providers are the bridge between the relatively concentrated equipment suppliers and a widely dispersed customer base of fuel stations. They are seen as key partners of the OEMs, helping to bring parts and services to a diverse set of geographies and customers. Several scaled providers have started to develop larger footprints and are advantaged in serving larger customers with many locations.  

However, the market is still highly fragmented with many small, family-owned distributors and service providers working from one or two locations. In sum, there remains a lot of consolidation and platform-building opportunity in the sector.  

What makes D&H United an exemplary asset in this space?

Semple: D&H United has grown into a premier platform in its industry, with a remarkable breadth and quality of testing, inspection and compliance (TIC), maintenance, and installation services across both retail fueling and EV charging infrastructure. This makes the company an essential partner for its customers. Technician quality, brand reputation, 24/7/365 service, and D&H United’s geographic coverage are key areas of differentiation cited by customers.  

Gillam: We continue to see strong investor appetite for companies like D&H United that provide mission-critical, non-deferrable services in fragmented industries. The company has done an excellent job executing its growth strategy, both organically and through M&A.  

What advice do you have for investors interested in fuel station services?

Semple: Fuel station and EV charging infrastructure is complex, with many components that must work reliably for customers to fuel their cars. This complexity drives strong, recurring demand for many services and parts to keep the ecosystem running smoothly. As large, national operators further consolidate the fueling station and convenience store market, demand for a single point of responsibility service providers like D&H United will only increase. 

Jones: The service network currently supporting fuel stations is well positioned to extend into services related to the rise in EV charging needs. There is a lot of overlap in installation requirements between fuel pumps and EV chargers, and a common need to service customers quickly across a very dispersed geography. Many fuel station services businesses may have to add service capabilities and add expertise, but much of their operations and services are transferable. It’s a resilient and growing sector that will see even more favorable growth as the need for electric vehicle charging stations accelerates.