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Parkland Fuel to acquire 75 per cent of SIL
Posted on Wednesday, 10 October 2018 14:02
Parkland Fuel has agreed to acquire a 75.0 per cent stake in SOL Investments (SIL), billed as the largest independent fuel marketer in the Caribbean, for USD 1.21 billion, plus customary post-closing adjustments on a cash- and debt-free basis.
SOL Limited, the owner of the target, which itself is privately-held by the Simpson Group, will also purchase 12.16 million common shares in the buyer to control about 9.9 per cent of its equity for CAD 518.00 million (USD 399.54 million).
Parkland Fuel is billed as one of the largest marketers of fuel and petroleum products in North America and it expects the addition of SIL to expand its global supply reach.
The deal is subject to regulatory approval and the receipt of third-party consents and is expected to close before the end of the year.
SOL, the largest fuel and convenience store operator in the Caribbean, has more than 4.80 billion litres of annual volume and about USD 215.00 million in estimated annual adjusted earnings before interest, taxes, depreciation and amortisation.
The group has 526 retail stations, which produce 2.00 billion litres of fuel across 20 countries every year.
Parkland plans to fund the acquisition with a fully underwritten financing packaging worth CAD 1.10 billion, with Canadian Imperial Bank of Commerce and National Bank of Canada as bookrunners.
Of this amount, CAD 470.00 million will be senior secured bank debt, while CAD 250.00 million will be in the form of a term loan and CAD 300.00 million from a term facility.
In addition, Parkland will also receive a call option for the remaining 25.0 per cent stake in SIL, should it come up for sale.
The deal is taking place a year after the buyer picked up Chevron Canada R&M from Chevron Canada for CAD 1.46 billion. It also paid CAD 2.80 billion for six retail fuel stations from Imperial Oil back in 2016.
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