Parkland To Buy Pioneer Energy For C$378 Mln - Quick Facts

(RTTNews) - Parkland Fuel Corp (PKI.TO), a marketer of fuel and petroleum products, Wednesday agreed to buy the assets of Pioneer Energy for C$378 million, subject to the satisfaction of closing conditions and adjustments.

The deal price includes $259 million in cash, $119 million in common shares of Parkland, and the assumption of standard operating liabilities.

At 6.9 times Pioneer's trailing twelve month EBITDA of about $55 million, the acquisition is both accretive and attractively priced for a premier retail fuel network, Parkland said.

Pioneer's current joint owners, Pioneer Group Inc and Suncor Energy Inc (SU, SU.TO) will receive consideration as follows

- Pioneer Group Inc. will receive $76 million or 39% of their total consideration in cash and $119 million or 61% of their total consideration in common shares of Parkland.

- Suncor Energy Inc. will receive $183 million in cash.

Parkland said the deal adds 319 gas stations in Ontario and 74 gas stations in Manitoba, increasing Parkland's national footprint to more than 1,000 gas stations, or roughly 9 percent of the Canadian retail fuel market. The deal also includes 148 Pioneer-branded and 228 Esso-branded gas stations.

While the Acquisition of Pioneer is expected to boost Parkland's 2015 Adjusted EBITDA expectations to $250 million, it is not expected to close before the end of 2014.

Parkland's expected case forecast for 2014 of $200 million in Adjusted EBITDA included $12 million in acquisitions. As timing for the completion of the acquisition is expected to be later than originally anticipated, Parkland's expected case for 2014 has been reduced by $12 million (acquired EBITDA assumption) to $188 million and the low and high cases have also been adjusted down by the corresponding assumption for acquired EBITDA ($7 million and $15 million respectively).