Parkland Fuel to acquire majority of CST Brand’s Canadian business and assets
Parkland Fuel Corporation, Canada’s largest independent marketer of fuel and petroleum products, has entered into an agreement with Alimentation Couche-Tard Inc. to acquire the majority of the Canadian business and assets of CST Brands, Inc.
Couche-Tard has announced a definitive merger agreement with CST under which Couche-Tard will acquire CST in an all-cash transaction, subject to customary conditions, including approval by CST shareholders and receipt of regulatory approvals.
The acquisition is conditional upon closing of the CST Transaction, among other conditions, which is expected to occur in early 2017.
The assets acquired as part of the acquisition will consist of: CST’s Dealer and Commissioned Agents’ retail business; CST’s Commercial Cardlock business; CST’s Commercial and Home Heat businesses; a number of CST’s company-operated stores to be determined following the Competition Bureau of Canada’s review of the CST transaction; and, corporate presence in Montreal.
Subject to the satisfaction of customary closing conditions and adjustments, Parkland will pay approximately CAD 965 million (USD 746.9 million) for the acquired assets.
“This highly-accretive acquisition extends Parkland’s network coverage with a premier fuel network in Québec and Atlantic Canada and enhances our presence in Ontario. We expect pre-synergy accretion of over 20% to Distributable Free Cash Flow per Share on a trailing 12 months basis at June 30, 2016,” said Bob Espey, president and CEO of Parkland.
“CST is a prominent fuel marketer in North America with a strong reputation for quality customer service. The acquisition allows Parkland to add the Ultramar brand which is one of the most recognized retail fuel brands in Québec and Atlantic Canada. We look forward to welcoming the Canadian CST employees, agents and dealers to the Parkland team as we will be looking to leverage their deep expertise and knowledge of these markets.”