The Canada-based Parkland Fuel Corporation is acquiring 75 percent of the Caribbean fuel supplier SOL Investments Ltd. for US$1.21 billion.
SOL Investments’ parent company SOL Ltd. will, in turn, buy 12.16 million Parkland shares for about US$33 per share. That will give SOL Ltd. a 9.9-percent ownership stake in Parkland, according to the announcement from the two companies.
The remaining SOL Investments stock are subject to minority purchase/sale rights, meaning that Parkland may elect to acquire the shares or SOL may elect to sell them, the announcement states.
The announcement said the transaction will be financed via Parkland borrowing about US$847 million, as well as SOL Ltd. providing nearly US$399 million in equity financing through its investment in Parkland.
The companies touted the transaction as being mutually beneficial.
“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,” said Parkland CEO Bob Espey. “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. Together, Parkland and SOL create a significant North American and Caribbean growth platform.”
“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,” added Sir Kyffin Simpson, whose family owns the SOL group.
According to the announcement, SOL supplies and markets a total of 4.8 billion liters of fuel annually across 23 countries in the Caribbean, and generated US$215 million in adjusted earnings before taxes, depreciation and amortization in the 12-month period ending June 2018.
Parkland is Canada’s largest fuel supplier and marketer, and is also a convenience store operator.
The announcement stated the transaction is subject to the receipt of customary third-party consents and regulatory approvals, including approval of the Toronto Stock Exchange. The transaction should occur in the late fourth quarter of this year, the companies stated.