- Enhanced Logistical, Storage and Marketing Capabilities Further Differentiates Parkland from Other Canadian Fuel Marketers -
RED DEER, AB, Dec. 20, 2012 /CNW/ - Parkland Fuel Corporation ("Parkland" or the "Corporation") (TSX: PKI), Canada's largest independent distributor and marketer of petroleum products, today announced that it has entered into a definitive agreement to acquire the assets of Elbow River Marketing Limited Partnership ("Elbow River") from AvenEx Energy Corporation (TSX: AVF) (the "Acquisition"). The Acquisition is expected to close and be effective on or around February 15, 2013. All financial figures are stated in Canadian dollars.
- Subject to satisfaction of closing conditions, the assets of Elbow River will be purchased for total cash consideration of $80 million and the assumption of between $10 million and $15 million in debt;
- Elbow River's EBITDA for the four quarters preceding September 30, 2012 was approximately $20 million;
- Expected to be accretive to Parkland shareholders at $0.13/share in net earnings and $0.16/share in distributable cash flow on an annualized basis;
- Parkland's current financial position is sufficient to fund this transaction; and
- Elbow River's current annual sales volumes of approximately 2 billion litres are in addition to Parkland's 2016 target of seven billion litres in fuel sales as outlined in Parkland Penny Plan.
- Stable and diversified source of additional supply earnings;
- Rail capability enables supply and throughput opportunities for the Bowden Terminal; and
- Additional supply options provide the platform for market expansion.
- Elbow River will operate as a separate stand-alone subsidiary; and
- Expected opportunities around rail logistics and product terminals.
Elbow River is a North American transporter, supplier and marketer of petroleum products including liquefied petroleum gases (butane, propane, and condensate), crude oil, heavy fuel oil, and a growing portfolio of refined fuel and bio-fuel products. Elbow River has differentiated themselves in this space through their rail car logistics capabilities, managing a fleet of 1,200 rail cars. Their strategy of geographic arbitrage leverages their strong network of relationships to match purchase and sales contracts, employing a risk averse approach to marketing. Operating in the petroleum products marketing sector for 30 years has provided Elbow River with the expertise and logistical capabilities to rapidly respond to emerging opportunities, which has allowed them to establish a record of profitability.
"The acquisition of Elbow River Marketing extends Parkland's marketing capability within the petroleum marketing sector, diversifies our earnings and further differentiates Parkland from other Canadian fuel marketers," said Bob Espey, President and Chief Executive Officer of Parkland. "We see significant opportunity in joining the marketing, logistics, and risk mitigation expertise of Elbow River's highly respected marketing team with Parkland's knowledge and sales capacity within the downstream fuel marketing sector."
Elbow River fulfills an important part of the Parkland Penny Plan by enhancing Parkland's supply capabilities, allowing Parkland to further exploit North American supply and demand imbalances. The Acquisition is expected to extend the Corporation's relationships with refiners, fuel suppliers, and fuel customers. Elbow River's experience in propane and growing focus on fuel products represent two areas of opportunity.
The Acquisition is subject to the receipt of all necessary third party and regulatory approvals including approval under the Competition Act.
Conference Call Information
President and CEO Bob Espey and Senior Vice President and CFO Mike Lambert will host a webcast and conference call on Thursday, December 20, 2012 at 9:00 a.m. MST (11:00 a.m. EST) to discuss the acquisition of Elbow River Marketing. Following their formal remarks they will then take questions from securities analysts, brokers and investors.
Please log into the webcast slide presentation 10 minutes before the start time at:
To access the conference call by telephone from within Canada dial toll free 1-888-241-0394. International callers or callers from the Toronto area should use (647) 427-3413. Please connect approximately 10 minutes prior to the beginning of the call and quote the conference ID: 8175 7869.
The webcast will be available for replay two hours after the conference call ends. It will remain available at the link above for 90 days.
Forward Looking Information
Certain information included herein is forward-looking. Forward-looking statements include, without limitation, statements regarding the successful completion of the Acquisition and the timing thereof, the anticipated benefits of the Acquisition, Parkland's future financial position, business and growth strategies, including the manner in which such strategies will be implemented, budgets, projected costs, sources of growth, capital expenditures, financial results, taxes, future acquisitions and the efficiencies to be derived therefrom, effectiveness of internal controls, sources of funding for growth capital expenditures, anticipated dividends and the amount thereof, if any, to be declared by Parkland Fuel Corporation, and plans and objectives of or involving Parkland. Many of these statements can be identified by looking for words such as "believe", "expects", "expected", "will", "intends", "projects", "projected", "anticipates", "estimates", "continues", or similar words and include, but are not limited to, statements regarding the accretive effects of acquisitions and the anticipated benefits of acquisitions. Parkland believes the expectations reflected in such forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties some of which are described in Parkland's annual report, annual information form and other continuous disclosure documents. Such forward-looking statements necessarily involve known and unknown risks and uncertainties and other factors, which may cause Parkland's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Such factors include, but are not limited to: failure to obtain necessary regulatory or other third party consents and approvals; the 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 including increases in taxes; changes in environmental and other regulations; and other factors, many of which are beyond the control of Parkland. Any forward-looking statements are made as of the date hereof and Parkland does not undertake any obligation, except as required under applicable law, to publicly update or revise such statements to reflect new information, subsequent or otherwise.
About Parkland Fuel Corporation
Parkland Fuel Corporation is Canada's largest independent marketer and distributor of petroleum products, managing a nationwide network of sales channels. We are Canada's local fuel company, delivering gasoline, diesel fuel, lubricants, heating oil and other products to businesses, consumers and wholesale customers through community based operators who care.
SOURCE: Parkland Fuel Corporation
For further information:
For investor and media inquiries please contact Tom McMillan, Director of Corporate Communications at [email protected] or 1-800-662-7177 ext 2533. To sign up for Parkland's investor information services, please go to http://bit.ly/PKI-Info or visit www.parkland.ca.