Parkland Fuel Corp. (TSX:PKI) has struck a deal to buy Canada’s largest private independent fuel marketer.
Red Deer-based Parkland announced on Wednesday that it’s acquiring Pioneer Energy for $378 million. The purchase will give Parkland another 319 gas stations in Ontario and 74 in Manitoba — boosting its national total to more than 1,000 stations, or about nine per cent of the Canadian fuel market.
“We have long recognized the Ontario retail marketplace as a critical growth opportunity for Parkland, aligning with Parkland’s overarching supply strategy,” said company CEO and president Bob Espey in a release. “We also recognize Pioneer Energy as one of Canada’s most respected independent retail fuel marketers, having built Pioneer into the strongest independent retail fuel brand in Ontario.”
The Pioneer assets are expected to increase Parkland’s annual fuel sales by more than two billion litres in the first year.
The gas stations being acquired include 152 company-owned and 241 independent operations. They were owned jointly by Pioneer Group Inc. and Suncor Energy Inc.
The purchase price will include $259 million in cash and $119 million worth of Parkland common shares.
The purchase, which remains subject to certain conditions, is not expected to close until net year.
Parkland’s release said the company’s strong balance sheet leaves the door open for further growth.
“We continue to anticipate additional accretive acquisitions, adhering to our disciplined approach to growth,” said Espey.
Pioneer Energy was founded in 1956 by Murray Hogarth, who died on Aug. 11, 2014.
“It is extremely gratifying to me that the Pioneer team and brand will continue driving forward with Parkland, along with our successful legacy that began in 1956,” said Hogarth prior to his death.