Parkland Agrees to Sell Canadian Propane Business to Avenir Energy

Parkland Corporation (TSX:PKI) disclosed on 5 June 2024 that it has reached an agreement with Avenir Energy Ltd. to sell off its Canadian commercial propane business for around $115 million in cash. Additionally, as part of the deal, Parkland will serve as the exclusive fuel supplier for a duration of ten years (referred to as the "Divestment").

"This deal marks a significant stride in reaching our goal of garnering $500 million through divesting non-core assets by the close of 2025," states Ian White, President of Parkland Canada. " Focusing on our core assets allows us to streamline operations and improve returns. Guided by our commitment to customer satisfaction, we remain optimistic about the potential to achieve growth and create value within our Canadian operations."

Pending fulfillment of specific closing conditions, the transaction is anticipated to conclude in the fourth quarter of 2024. Scotiabank is serving as the financial advisor for the divestment.

Parkland is a global distributor of fuel, a marketer, and a convenience retailer, operating in 26 countries throughout the Americas. Parkland caters to more than 1 million customers daily. The company's retail network caters to the fuel and convenience needs of everyday consumers, while its commercial operations supply industrial fuels to businesses, enhancing their customer service capabilities. Beyond fulfilling customers' essential fuel requirements, the company offers various options to assist them in reducing their environmental footprint. These initiatives encompass renewable fuels sourcing, manufacturing, and blending, carbon and renewables trading, solar power, and ultra-fast EV charging. With approximately 4,000 retail and commercial locations spanning Canada, the United States, and the Caribbean region, the company has cultivated supply, distribution, and trading capabilities to drive growth and enhance business performance.

Parkland's strategy is centered on two main pillars: Customer Advantage and Supply Advantage. Under the Customer Advantage pillar, Parkland strives to become the preferred choice of its customers by fostering their loyalty through proprietary brands, unique offerings, an extensive network, competitive pricing, reliable service, and an engaging loyalty program. The Supply Advantage pillar focuses on achieving the lowest cost to serve among independent fuel marketers and distributors in the challenging markets where Parkland operates. This is accomplished through strategically positioned assets, significant scale, and robust supply and logistics capabilities. Parkland's business is fundamentally supported by its workforce and values of safety, integrity, community, and respect, which are deeply ingrained throughout the organization. Parkland's success is propelled by its acquisition of high-quality businesses, organic growth, and its supply advantage.