Parkland Fuel Corporation (TSE:PKI, Mkt cap 3.02B, P/E 50.17, Div/yield 0.09/3.62, EPS 0.62, Shares 95.85M), an independent marketer of fuel and petroleum products, has announced two acquisitions that expand its commercial and retail businesses across Canada and in Wyoming.
The Alberta-based company revealed on Thursday that it has signed agreements to purchase the assets of PNE Corporation, as well as three service stations in Wyoming.
Parkland will pay C$17m for the assets and operations of PNE, a national provider of propane cylinder exchange services. The price represents approximately 5.7 times the adjusted EBITDA of the business.
According to Parkland, this acquisition will add approximately 17 million litres of propane on an annual basis and will expand the scope of the company’s propane business to include a national 20-pound cylinder exchange offering in addition to a 33- and 100-pound cylinder offering in Ontario.
“This acquisition introduces a new business line within the propane space for Parkland,” commented Bob Espey, Parkland’s president and CEO. “It will allow us to grow our commercial capabilities by introducing and leveraging PNE’s expertise in cylinder refilling, and distribution from British Columbia through to Québec. We look forward to continuing to provide strong customer service nationwide under the PNE banner and welcome PNE team members to Parkland.”
In the second transaction, Parkland has agreed to acquire two truck stops and one retail station from 7-Eleven Inc. The three sites are located in and around Cheyenne, Wyoming in the southeast part of the state.
Collectively, these sites are expected to sell more than 15 million gallons (55 million litres) of fuel on an annual basis.
“This acquisition will expand the Parkland USA presence in Wyoming by adding our first truck stops and retail stations in that state,” Bob Espey said.
Both acquisitions are anticipated to close by the end of 2016.
Parkland Fuel Corporation (TSE:PKI) distributes and markets fuels and lubricants. The Company delivers refined fuels and other petroleum products to motorists, businesses, consumers and wholesale customers. Its segments include Retail Fuels, Commercial Fuels, Parkland USA, Supply and Wholesale, and Corporate. Its Retail Fuels segment supplies and supports a network of over 1,070 retail gas stations in Canada. Its Commercial Fuels segment delivers bulk fuel, propane, heating oil, lubricants, agricultural inputs and other related products and services. Its Parkland USA segment supplies and distributes refined petroleum products in North Dakota, Montana, Minnesota, South Dakota and Wyoming. Its Supply and Wholesale segment manages fuel supply by contracting and purchasing fuel from refiners and other suppliers, distributing through third-party rail and highway carriers, storing fuel in owned and leased facilities and serving wholesale and reseller customers in Canada and in the United States. More from Reuters »
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