Parkland income fund growing into canada’s largest independent petroleum distributor

A little over three decades ago, its operations consisted of a couple gas stations and a truck.

A little over three decades ago, its operations consisted of a couple gas stations and a truck.

Today, Red Deer-based Parkland Income Fund is poised to become the largest national independent petroleum distributor in Canada, with operations in every province except Newfoundland and Labrador.

Parkland (TSX: PKI.UN) announced late Monday night that it has struck a deal to acquire Bluewave Energy Limited Partnership, a Nova Scotia petroleum distributor that delivers diesel fuel, gasoline, heating oil, lubricants and related products and services to commercial, industrial and residential customers. Bluewave is Shell’s largest branded distributor in Canada, with 2008 sales volumes of 645 million litres.

The purchase price is $214 million, which Parkland said it will pay through a combination of long-term debt, cash, assumed liabilities and limited partnership units convertible into Parkland units. Bluewave is a private company, with its largest shareholder Birch Hill Equity Partners.

The sale is expected to close around the end of January, subject to regulatory and third-party approvals.

During a conference call on Tuesday, Parkland president and CEO Mike Chorlton said the deal is attractive for a number of reasons. It gives Parkland a leading national independent fuel distributor and a platform for growth, a relationship with Shell, an expanded geographic footprint, product diversification and increased earnings.

“The transaction diversifies Parkland’s customer and supplier base, and balances its fuel supply portfolio with a balance of gasoline and distillate, which better matches refiners’ output,” said Chorlton.

The addition of Bluewave’s 2008 fuel volumes would give Parkland a 25 per cent increase in volumes, and increased earnings of 14 to 16 cents per unit, or 13 to 15 per cent.

Roger McKnight, a petroleum adviser with En-Pro International, pointed out that Parkland will face different challenges in the Maritimes.

“The problem with the Maritimes is that fuel prices to the consumer are regulated,” he said.

“They really aren’t in control of their bottom line.”

Bluewave serves about 73,000 customers, with 48 branches, 185 delivery trucks, 420 employees and 105 contractors.

“Parkland intends to offer employment to substantially all Bluewave employees,” said Chorlton.

Bluewave president and CEO Bill Sanford will become president of Parkland’s new Bluewave division.

Parkland originated as Parkland Beef Industries Ltd., of which Red Deer entrepreneurs Jack and Joan Donald bought a controlling interest in 1977. They steered the company into the oil products industry, with its name evolving into Parkland Industries and later Parkland Income Fund.

Today, Parkland operates retail and wholesale fuels and convenience store businesses at about 612 locations under the Fas Gas Plus, Fas Gas, Race Trac Fuels and Short Stop Food Stores brands, as well as through independent branded dealers. It transports fuel and other products, and supplies propane, bulk fuel, heating oil, lubricants, industrial fluids, agricultural inputs and associated services to commercial and industrial customers, and operates the Bowden refinery as a storage and contract processing site.

Parkland had nearly 1,200 employees at the end of 2008.

In trading on the Toronto Stock Exchange on Tuesday, Parkland units closed at $12.74, up 16 cents.

With files from The Canadian Press.

Just Posted

Hospitalizations jump in Red Deer due to opioid poisonings

Small city hospitals impacted more by opioid crisis

Central Alberta councils learn more about Bighorn Country proposal

A collection of central Alberta politicians are learning more about the province’s… Continue reading

High-speed chase led to fatal collision, jury hears

A Delburne man accused of manslaughter caused a fatal rollover collision during… Continue reading

‘Part of the solution:’ Alberta seeks proposals to build new refinery

EDMONTON — Alberta is looking for someone to build a new oil… Continue reading

Online ads spoil Christmas surprises, raising privacy concerns: experts

Lisa Clyburn knew she had found the perfect gift for her nine-year-old… Continue reading

Sebastian Giovinco, Jonathan Osorio and Adriana Leon up for top CONCACAF awards

Toronto FC’s Sebastian Giovinco and Jonathan Osorio are up for CONCACAF male… Continue reading

Huitema, Cornelius named 2018 Canadian Youth International Players of the Year

TORONTO — Canada Soccer has named striker Jordyn Huitema and defender Derek… Continue reading

Review: Too much Spider-Man? Not in the Spider-Verse

You might be forgiven for feeling superhero overload this holiday season. Had… Continue reading

‘Modern Family’s’ Sarah Hyland had second kidney transplant

LOS ANGELES — “Modern Family” star Sarah Hyland says she had a… Continue reading

Orlando SC acquires Canadian Tesho Akindele in trade with FC Dallas for cash

ORLANDO, Fla. — Canadian forward Tesho Akindele was traded to Orlando City… Continue reading

Koskinen notches third shutout, McDavid gets winner as Oilers blank Flames 1-0

EDMONTON — The Edmonton Oilers appear to have shored up their defence… Continue reading

Most Read