Acquisition adds third regional operating center in the United States
CALGARY, Alberta, Sept. 05, 2019 (GLOBE NEWSWIRE) -- Parkland Fuel Corporation (“Parkland”, “We”, “Our” or “Us”) (TSX:PKI) is pleased to announce that through its U.S. based subsidiaries (collectively, "Parkland USA"), it has entered into an agreement to acquire all of the issued and outstanding equity interests of Tropic Oil Company, Inc., as well as equity interests and the assets of certain of its affiliates (collectively, “Tropic Oil”).
Tropic Oil is headquartered in Miami, Florida, and transports, distributes and markets a full range of fuels and lubricants across the central and south Florida region. It supplies and operates nine cardlock facilities and four bulk storage plants and warehouses.
"The Tropic Oil acquisition continues on our US growth strategy by adding quality regional operators in regions where we can bring a distinct supply advantage,” said Bob Espey, President and CEO of Parkland. “This initial toehold in Florida also complements our Caribbean business by providing significant supply and distribution synergy potential. We welcome Steve Gorey from Tropic Oil’s leadership team and the rest of their employees into Parkland.”
“Through Tropic Oil, Parkland is adding its third Regional Operating Center (ROC) and expanding its presence into the southeastern states for the first time. Tropic Oil is Florida’s preferred supplier of marine diesel and lubricants, and is highly regarded for its ability to provide consistent, reliable service throughout the central and south Florida markets,” said Doug Haugh, President of Parkland USA. “This new Southeast ROC will be the operating platform that drives organic growth and enables further acquisitions across the region, while leveraging our business with Sol."
The acquisition will be funded out of cash flow from operations and existing credit facility capacity. The acquisition was completed at valuation metrics consistent with prior transactions in the US, and pro forma the acquisition, Parkland expects annual run-rate adjusted EBITDA of approximately C$60 million for its USA segment. The transaction is expected to close on Oct. 1, 2019 and is subject to closing conditions customary for transactions of this nature.
About Parkland
Parkland is an independent supplier and marketer of fuel and petroleum products and a leading convenience store operator. Parkland services customers across Canada, the United States, the Caribbean region and the Americas through three channels: Retail, Commercial and Wholesale. Parkland optimizes its fuel supply across these three channels by operating and leveraging a growing portfolio of supply relationships and storage infrastructure. Parkland provides trusted and locally relevant fuel brands and convenience store offerings in the communities it serves.
Parkland creates value for shareholders by focusing on its proven strategy of growing organically, realizing a supply advantage and acquiring prudently and integrating successfully. At the core of our strategy are our people, as well as our values of safety, integrity, community and respect, which are embraced across our organization.
Forward-Looking Statements
Certain statements contained in this news release constitute forward-looking information and statements (collectively, "forward-looking statements"). When used in this news release the words "expect", "will", "could", "would", "believe", "continue", "pursue" and similar expressions are intended to identify forward-looking statements. In particular, this news release contains forward-looking statements with respect to, among other things, the successful completion of the acquisition of Tropic Oil and the timing thereof; expected benefits of the acquisition, including potential synergies, organic growth and acquisition opportunities; expected run-rate adjusted EBITDA of Parkland USA following the acquisition.
These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These forward-looking statements speak only as of the date of this news release. Parkland does not undertake any obligations to publicly update or revise any forward-looking statements except as required by securities law. Actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous risks and uncertainties including, but not limited to, failure to complete the acquisition of Tropic Oil; failure to satisfy the conditions to closing of the acquisition; failure to achieve the anticipated benefits of the acquisition; general economic, market and business conditions; industry capacity; competitive action by other companies; refining and marketing margins; the ability of suppliers to meet commitments; actions by governmental authorities and other regulators including but not limited to increases in taxes or restricted access to markets; changes and developments in environmental and other regulations; and other factors, many of which are beyond the control of Parkland. See also the risks and uncertainties described in "Forward-Looking Information" and "Risk Factors" included in Parkland's Annual Information Form dated March 27, 2019 and in "Forward-Looking Information" and "Risk Factors" in the Q2 2019 MD&A and annual MD&A dated February 28, 2019, each as filed on SEDAR and available on the Parkland website at www.parkland.ca
Annual run-rate adjusted EBITDA is an internally-prepared estimate of annualized adjusted EBITDA which assumes full year contributions from the acquisitions to date. Annual run-rate adjusted EBITDA is a non-GAAP financial measure and may not be comparable to similar measures used by other issuers. See Parkland’s Q2 2019 MD&A and annual MD&A for further information on how Parkland calculates adjusted EBITDA and a reconciliation to the nearest IFRS measure.
