RED DEER — Parkland Fuel Corp. (TSX:PKI) has an agreement to buy the Cango Inc. fuel marketing business, which operates through a network of 155 retailers and dealers in Ontario under the Cango, Sunys, Gas Rite and Esso brands.
Financial terms weren’t released. Parkland said the price would be disclosed when the deal closes, about May 31.
Parkland has also agreed to acquire seven gas bars in British Columbia and Alberta from Overwaitea Food Group.
On an annual basis, Cango supplies more than 400 million litres of petroleum products to a network of 29 retailers and 126 dealers. Of those, 80 are Esso branded through Cango’s distributor agreement with Imperial Oil (TSX:IMO).
Parkland said its binding agreement with Cango is subject to approval from the federal Competition Bureau and other closing conditions.
The seven gas bars to be acquired from Overwaitea currently operate as Save On Foods. They will be rebranded to Fas Gas Plus, one of Parkland’s retail brands.
Based in Red Deer, Alta., Parkland Fuel is Canada’s largest independent marketer and distributor of fuels, with a countrywide network of sales channels for retail, commercial, wholesale and home heating fuel customers.
Its brands include Race Trac Gas, Bluewave Energy, Columbia Fuels, Great Northern Oil, Neufeld Petroleum & Propane, United Petroleum Products and Island Petroleum.
The company also released preliminary financial results for the first quarter of 2011 on Monday, saying it plans to release full results under the new International Financial Reporting Standards on May 30.
Parkland sold more than one billion litres of fuel in the first quarter, an increase of 207 million litres, or 25 per cent, compared with the same period in 2010.
EBITDA (earnings before interest taxes depreciation and amortization) for the first quarter were $46 million, an increase of $27 million, or 238 per cent, over the prior-year period.
“The combination of normal winter weather across Canada, strong refiners’ margins, and the inclusion of winter operations from Bluewave Energy and Island Petroleum led to strong results for the first quarter of 2011,” said Parkland president and CEO Bob Espey.
“In addition, our progress towards completing these acquisitions reflects the continued strategic focus at Parkland to grow through accretive acquisitions and demonstrates the continued opportunities that exist in today’s marketplace.”
On the Toronto Stock Exchange, Parkland stock was up 32 cents, or 2.68 per cent, at $12.27 Monday afternoon.