Calgary, Alberta, November 3, 2021 - 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.
Forward-Looking Statements
Certain statements contained in this news release constitute forward-looking information and statements (collectively, "forward-looking statements"). When used in this news release the words "expect", "will", "could", "would", "believe", "continue", "pursue" and similar expressions are intended to identify forward-looking statements. In particular, this news release contains forward-looking statements with respect to, among other things, the successful completion of the acquisition of Urbieta and the timing thereof; expected benefits of the acquisition, increasing retail and convenience presence in the market, Parkland's ability to add value to the acquired network through its expanded ON the RUN brand, consolidation opportunities for Parkland, the expected gross profit split amongst the segments of the business, and the anticipated funding of the acquisition.
These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These forward-looking statements speak only as of the date of this news release. Parkland does not undertake any obligations to publicly update or revise any forward-looking statements except as may be required by securities law. Actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous risks and uncertainties including, but not limited to, failure to complete this acquisition; failure to satisfy the conditions to closing of the acquisition, including approval by the U.S. Federal Trade Commission and Department of Justice; failure to realize all or any of the anticipated benefits of the acquisition; general economic, market and business conditions; competitive action by other companies; refining and marketing margins; the ability of suppliers to meet commitments; actions by governmental authorities and other regulators including but not limited to increases in taxes or restricted access to markets; changes and developments in environmental and other regulations; and other factors, many of which are beyond the control of Parkland. See also the risks and uncertainties described in "Forward-Looking Information" and "Risk Factors" included in Parkland's Annual Information Form dated March 5, 2021, and "Forward-Looking Information" and "Risk Factors" included in the Q3 2021 MD&A dated November 2, 2021 and the Q4 2020 MD&A dated March 4, 2021, each filed on SEDAR and available on the Parkland website at www.parkland.ca. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
About Parkland
Parkland is a leading convenience store operator and independent supplier and marketer of fuel and petroleum products. Parkland services customers across Canada, the United States, the Caribbean region and the Americas through three channels: Retail, Commercial and Wholesale. Parkland optimizes its fuel supply across these three channels by operating and leveraging a growing portfolio of supply relationships and storage infrastructure. Parkland provides trusted and locally relevant fuel brands and convenience store offerings in the communities it serves.
Parkland creates value for shareholders by focusing on its proven strategy of growing organically, realizing a supply advantage and acquiring prudently and integrating successfully. At the core of our strategy are our people, as well as our values of safety, integrity, community and respect, which are embraced across our organization.
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