Parkland Fuel Corp. has announced that it has entered into an agreement to acquire all of the issued and outstanding equity interests of Tropic Oil Co., Inc., as well as equity interests and the assets of certain of its affiliates.
Tropic Oil is headquartered in Miami, Florida, and transports, distributes and markets a full range of fuels and lubricants across the central and south Florida region. It supplies and operates nine cardlock facilities and four bulk storage plants and warehouses.
“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,” said Bob Espey, President and CEO of Parkland. “This initial toehold in Florida also complements our Caribbean business by providing significant supply and distribution synergy potential. We welcome Steve Gorey from Tropic Oil’s leadership team and the rest of their employees into Parkland.”
“Through Tropic Oil, Parkland is adding its third regional operating centre (ROC) and expanding its presence into the south-eastern states for the first time. Tropic Oil is Florida’s preferred supplier of marine diesel and lubricants, and is highly regarded for its ability to provide consistent, reliable service throughout the central and south Florida markets,” said Doug Haugh, President of Parkland USA. “This new Southeast ROC will be the operating platform that drives organic growth and enables further acquisitions across the region, while leveraging our business with Sol.”
The acquisition will be funded out of cash flow from operations and existing credit facility capacity. The acquisition was completed at valuation metrics consistent with prior transactions in the US, and pro forma the acquisition, Parkland expects annual run-rate adjusted EBITDA of approximately CA$60 million for its USA segment. The transaction is expected to close on 1 October 2019 and is subject to closing conditions customary for transactions of this nature.
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