- 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.
Acquisition Highlights:
Grow
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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;
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Elbow River's EBITDA for the four quarters preceding September 30, 2012
was approximately $20 million;
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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;
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Parkland's current financial position is sufficient to fund this
transaction; and
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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.
Supply
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Stable and diversified source of additional supply earnings;
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Rail capability enables supply and throughput opportunities for the
Bowden Terminal; and
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Additional supply options provide the platform for market expansion.
Operate
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Elbow River will operate as a separate stand-alone subsidiary; and
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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:
http://www.snwebcastcenter.com/custom_events/parkland-20121218/site/
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 investor and media inquiries please contact Tom McMillan, Director of Corporate Communications at tom.mcmillan@parkland.ca 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.