Parkland Fuel Completes Acquisition Of Chevron Canada R&M From Chevron For US$1.24 Billion

Published: Apr 18 2017
Deal Summary

Parkland Fuel Corporation, a marketer of fuel and petroleum products, completed the acquisition of Chevron Canada R&M ULC, a company that operates Canadian integrated downstream fuel business, from Chevron Canada Limited, a company engaged in finding, producing, refining, and marketing crude oil and natural gas, for a purchase consideration of approximately C$1,646 million (MM) (US$1,237.53 MM), including an estimated working capital of C$186 MM (US$139.84 MM).

Parkland Fuel funded the consideration in cash from proceeds received from C$660 MM (US$496.21 MM) bought deal private placement; C$268 MM (US$201.49MM) drawn on revolving credit facility; C$500 MM (US$375.92 MM) from a bridge facility; and C$40 MM (US$30.07 MM) from non-debt sources.

The downstream fuel business consists of 129 Chevron-branded retail service stations principally located in Metro Vancouver; 37 commercial cardlock sites in British Columbia and Alberta; three marine fueling stations located in Vancouver; a 55,000 bd of complimentary refinery in Burnaby; three terminals located in Burnaby, Hatch Point, and Port Hardy, British Columbia; and a wholesale business which includes aviation fuel sales to the Vancouver International Airport.

Merrill Lynch, Pierce, Fenner & Smith Incorporated, TD Securities Inc. and National Bank Financial Inc. acted as financial advisors, while McCarthy Tetrault LLP and Bennett Jones LLP acted as legal advisors to Parkland Fuel in the transaction. Osler, Hoskin & Harcourt LLP acted as legal advisor to Chevron Canada in the transaction.

The transaction enables Parkland Fuel to strengthen its supply-focused business model and will add significant scale with Chevron retail brand and network in British Columbia.

Bob Espey, president and CEO of Parkland, said, “This acquisition provides Parkland with British Columbia’s strongest fuel marketing business and will make Parkland the exclusive distributor of Chevron-branded fuels. With this acquisition, Parkland is also acquiring the Burnaby Refinery, a proven asset that directly supports our core fuel marketing business in an important region, and enhances our supply advantage. We are extremely pleased to welcome the Chevron Canada refining and marketing employees to the Parkland team. We believe in and are committed to investing in these assets, and the local employees who will help us grow in BC and beyond.”

The transaction implies a value of US$8,509,224.81 per fuel station.

Deal history

Completed: On October 1, 2017, Parkland completed the acquisition of Chevron Canada R&M from Chevron Canada, for a purchase consideration of approximately C$1,646 MM (US$1,237.53 MM).

Announced: On April 18, 2017, Parkland entered into an agreement to acquire Chevron Canada R&M from Chevron Canada, for a purchase consideration of approximately C$1,646 MM (US$1,237.53 MM.

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