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Bullboard - Stock Discussion Forum Parkland Corp T.PKI

Alternate Symbol(s):  PKIUF

Parkland Corporation is an international fuel distributor, marketer and convenience retailer with operations in 26 countries across the Americas. The Company’s segments include Canada, International, USA and Refining. Its retail network meets the fuel and convenience needs of everyday consumers. It also provides a range of choices to help them lower their environmental impact. These include... see more

TSX:PKI - Post Discussion

Parkland Corp > grows U.S. retail business by over 90 percent with acquisit.
View:
Post by Betteryear2 on Nov 03, 2021 7:14am

grows U.S. retail business by over 90 percent with acquisit.

CALGARY, ABNov. 3, 2021 /PRNewswire/ - Parkland Corporation ("Parkland", "we", "our", or "the Company") (TSX: PKI) is pleased to announce that through its wholly owned U.S. subsidiaries (collectively, "Parkland USA"), it has entered into an agreement to acquire substantially all of the assets of Urbieta Oil Co. and certain of its affiliates (collectively, "Urbieta"). This acquisition complements Parkland's existing Florida commercial business by establishing a large retail and convenience growth platform with high quality real estate in Miami.

"This acquisition advances our growth strategy to increase our convenience retail presence in a region where we have had success with fuel supply and commercial operations," said Doug Haugh, President of Parkland USA. "Adding the Urbieta stores nearly doubles our U.S. retail business, provides immediate scale in a resilient, fast-growing market, and creates opportunity to meet customers' needs through our ON the RUN convenience brand".

Family owned and operated since 1974, Urbieta is a well-established retail, convenience, and fuel distribution business with 2020 annual fuel sales of approximately 465 million litres. Urbieta's operations are concentrated in the Miami market. The transaction includes 94 retail locations including the real estate purchase of 54 strategic sites.

"In addition to adding an exceptional team, this acquisition provides a springboard for growth in the Southern Florida market with close proximity to our Caribbean business," added Haugh. "The fragmented U.S. market presents a long runway of consolidation opportunities for Parkland to build scale, and better serve our customers. We will remain disciplined in our appraisal of the opportunities we see in front of us."

The valuation metrics of this transaction reflect Urbieta's scale, significant retail weighting and the purchase of strategic real estate. Gross profit from the acquired assets is split approximately 85 percent retail and 15 percent commercial and wholesale operations. 90 percent of the transaction consideration will be funded out of existing credit facility capacity, and the remaining 10 percent with Parkland common shares issued from treasury. The transaction is subject to customary closing conditions and is expected to close in the fourth quarter of 2021.

Comment by Billybabin61 on Nov 03, 2021 8:34am
No details on the extent of the share dilution of the 10 % quoted.
Comment by Eastbank on Nov 03, 2021 9:59am
Great financial results for the quarter lifted the stock $1.50 at the open , but quickly backed off to negative with the news of yet another acquisition involving some share dilution. Operations still positive with optimism for continued growth.
Comment by Billybabin61 on Nov 03, 2021 10:11am
Agree, the stock most likely would have had a good run today if it were not for the new takeover of the Florida chain. There is not much visibility yet for analysts to digest. I hope there is not alot of dilution because if the financing for the share offering is below the current price, it will be a drag. Where are the details??
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