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

Raising awareness for Bikers Against Child Abuse

Second annual Raise A Ruckus Against Child Abuse was held at the Red Deer Radisson Hotel Saturday

Central Alberta Yogathon cancelled Saturday

Due to air quality concerns the fourth annual event will take place Sept. 15

City Hall Park construction begins next week

Construction to update Red Deer’s City Hall Park is set to begin… Continue reading

PHOTOS: Jazz at the Lake begins

The 16 annual event began Friday and runs until Sunday in Sylvan Lake

Photos: Lunchtime tunes on Alexander Way

Final concert of the summer

WATCH: Medicine River Wildlife Centre opens new playground

The grand opening of the playground was Saturday morning

Thousands to attend funeral service for officers killed in Fredericton shooting

FREDERICTON — Hundreds of people have lined the route of a funeral… Continue reading

Calgary police officer seriously injured

CALGARY — The Calgary Police Service says one of its officers was… Continue reading

Canadians react to death of former UN secretary-general Kofi Annan at age 80

MONTREAL — Canadian politicians are adding their voices to the international reaction… Continue reading

‘Four of a dozen kids will not make it:’ Tina Fontaine’s family healing together

WINNIPEG — Melissa Stevenson was just starting her career 18 years ago… Continue reading

No winning ticket for Friday night’s $16 million Lotto Max jackpot

TORONTO — No winning ticket was sold for the $16 million jackpot… Continue reading

Hundreds of neo-Nazis march in Berlin, protected by police

BERLIN — Hundreds of neo-Nazis waving flags with the colours of the… Continue reading

Romanian trucker is Genoa bridge’s 43rd victim

GENOA, Italy — The Latest on the Italy bridge collapse (all times… Continue reading

1 dead, 6 injured after building collapse in Nigeria capital

ABUJA, Nigeria — An emergency response chief says one person is dead… Continue reading

Most Read

Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month