Parkland Fuel Corp. acquires large portion of Sol

October 15, 2018 By    

Parkland Fuel Corp., a Canadian independent marketer of fuel and petroleum products, and Sol Ltd. agreed to a business combination between Parkland and Sol Investments Ltd. and its subsidiaries.

The transaction will result in Parkland acquiring 75 percent of the issued and outstanding shares in the capital of Sol Investments Ltd. for total consideration of $1.21 billion plus customary post-closing adjustments on a cash-free and debt-free basis, and Sol Ltd. acquiring 12.16 million common shares in the capital of Parkland.

A privately-held company owned by the Simpson Group, Sol is an independent fuel marketer in the Caribbean and a wholly-owned subsidiary of Sol Ltd. The company features a large LP gas distribution business, particularly in the commercial and industrial sectors.

“The addition of Sol will extend our global supply reach and enable us to continue to build our supply advantage to benefit our entire business,” says Bob Espey, Parkland president and CEO. “With its integrated supply chain backed by an extensive distribution network, fortress assets, a premier brand portfolio and an exceptional team, Sol has built a strong market position with unparalleled regional scale.”

Espey explains the deal will help growth in North America and the Caribbean with the combination of Sol’s retail operations and supply network along with Parkland’s scale.

“I am exceptionally pleased to announce the coming together of Parkland and Sol, which will ensure an exciting and dynamic future for everyone,” says Kyffin Simpson, founder of Sol Ltd. “With a desire to continue to develop and grow the business through expansion in new areas, I am extremely blessed to bring in our good friends Parkland of Canada to the Caribbean. I have long admired Parkland as a company with their futuristic vision and energy, and I have been tremendously impressed with Bob Espey’s strong leadership along with his exceptional management team.”

The transaction adds earnings from 526 retail stations for Parkland and positions the company to access supply at scale in the U.S. Gulf Coast, creating future growth opportunities and supply advantages in the U.S. Gulf and Atlantic coasts for Parkland USA. Additionally, the Sol operating brands will remain in place, and the Sol business will retain management and continue to be managed from the Caribbean, the agreement explains.

“The scale of the pro-forma business combined with the strong cash flow from operations and operational synergies expected from Sol will further strengthen Parkland’s balance sheet and capital structure,” says Mike McMillan, CFO of Parkland.

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Joe McCarthy was an associate editor at LP Gas Magazine.

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