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Parkland to enter new region with Tropic Oil
Posted on Friday, 06 September 2019 11:37
Parkland Fuel, through its US subsidiaries, is buying Tropic Oil in a deal due to close on 1st October 2019.
No financial details have been announced, but the acquiror expects to fund the purchase using cash flow from operations and from its existing credit facility.
The deal, which will add a third regional operating centre (ROC) for Parkland in the US, remains subject to the usual closing conditions.
Founded in 1952 and based in Medley, Tropical Oil claims to be a leading supplier of fuels and lubricants to the central and south Florida market.
Its operations comprise a 200,00 square foot warehouse, nine cardlock facilities and four bulk storage plants.
The group provides products such as heavy-duty diesel engine oils, hydraulic fluids and trunk piston engines used for the automotive, aviation and marine industries, among others.
Tropical Oil’s partners include the likes of Mobil, Shell and ConocoPhillips.
Bob Espey, chief executive of Parkland, said: “The Tropic Oil acquisition continues on our US growth strategy by adding quality regional operators in regions where we can bring a distinct supply advantage.”
The deal marks the first entry into the country’s southeastern states for the buyer and will use the newly added ROC to help drive organic growth and acquisitions across the area.
On a pro forma basis for the transaction, Parkland expects to post annual run-rate adjusted earnings before interest, tax, depreciation and amortisation of around CAD 60.00 million (USD 45.38 million) for its US segment.
Headquartered in Calgary, the acquiror provides fuel and petroleum products worldwide, operating primarily through its retail, commercial and wholesale divisions.
Parkland’s brands include the likes of Chevron, Pioneer and Bluewave Energy and the group generated revenue of CAD 9.07 billion for the six months ended 30th June 2019, up 27.2 per cent from CAD 7.13 billion in the corresponding period of 2018.
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