Parkland Income Fund to buy Bluewave Energy in deal worth $214 million

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RED DEER, Alta. - Parkland Income Fund (TSX:PKI.UN) says it will become the largest independent petroleum distributor in Canada with the $214-million purchase of Bluewave Energy Limited Partnership, a privately held company based in Dartmouth, N.S.
Bluewave distributes Shell-branded fuels and has operations across in the country except in Manitoba, Quebec and Newfoundland.
It delivers furnace oil, diesel fuel, gasoline and other related products to homes and businesses. Bluewave also sells, services and finances heating, air conditioning and fuel storage equipment.
Based in Red Deer, Alta., Parkland currently runs retail and wholesale fuels and convenience store businesses at about 612 locations across Canada under the names Fas Gas Plus, Fas Gas, Race Trac Fuels and Short Stop Food Stores.
Parkland also operates the Bowden refinery near Red Deer, Alta., as a storage and contract-processing site.
The income fund said the Bluewave transaction is expected to add immediately to Parkland's earnings and cash flow on a per unit basis and will expand the company's presence into Atlantic Canada.
With the acquisition, Parkland will be in every province except Newfoundland and Labrador.
Parkland added that the acquisition will help drive company growth in fuel volumes and cash flow, particularly in non-urban markets.
"With this transaction, we are adding one of Canada's leading independent fuel distributors to our portfolio, expanding our geographic footprint into Atlantic Canada, strengthening our position in Ontario and Western Canada, and further balancing our product mix," Mike Chorlton, Parkland's president and chief executive officer, said in the announcement late Monday.
"This business has an excellent management team and employees that are among the best in our industry, and we look forward to welcoming them into the Parkland family," Chorlton said.
Once the deal is complete, expected in January, Parkland said it will integrate the Bluewave team into the combined company with Bluewave's current chief executive officer becoming president of Parkland's Bluewave division.
"I am confident the integration will be seamless," said Bluewave's CEO Bill Sanford. "Together, we will be Canada's leading independent petroleum distribution company."
The purchase will be financed from Parkland's existing credit facilities, cash on hand, the assumption of certain liabilities of Bluewave and the issuance of up to two million Class C limited partnership units to Bluewave shareholders which are valued at $12.55 per unit.
The Class C units will be exchangeable into Parkland income fund units on a one-for-one basis. Parkland currently has about 43 million units outstanding, giving the fund a total market value of $541 million as of Monday's close.
Parkland said it had also increased its total bank credit facilities to $400 million from a previous $265 million.

Organizations: Bluewave, Parkland Income Fund, TSX Fas Gas Plus

Geographic location: Atlantic Canada, RED DEER, Newfoundland and Labrador Dartmouth Manitoba Quebec Ontario

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