CALGARY, Alberta — Following a flurry of acquisitions, Parkland Corp. plans to focus on integrating the recent purchases across its network during 2022.
"In 2021, we announced record acquisitions and welcomed more than 1,500 new employees to Parkland. The pace and value of these transactions represents the execution of two years of acquisitions in one," President and CEO Bob Espey stated during the company's fourth-quarter 2021 earnings call, held March 3. "As always, we were disciplined [and] selected companies at attractive values and with synergy potential."
Acquisitions made since the third quarter of 2020 will contribute roughly $200 million of adjusted EBITDA this year. And following synergy capture, the company expects they will contribute $280 million by 2024, according to Espey.
Parkland will complete a few additional small deals in the coming weeks, noted Chief Financial Officer Marcel Teunissen. The company will then shift to the integration phase of the M&A process as it slows down the pace of acquisitions.
Organic Growth Opportunities
"Having accelerated the execution of our acquisition strategy through 2021, we entered 2022 with a great deal of momentum and high confidence in our ability to advance our organic growth strategy," Espey explained. "There's a lot to be excited about in 2022. We have a long runway of accretive organic growth opportunities, which will strengthen our customer propositions and expand the ways we help our customers lower their environmental impact."
This year, Parkland will also continue developing its existing business by further strengthening its retail and supply capabilities across all geographies, and adding new accounts to grow its customer base and market share, the chief executive added.
The company's plans call for expanding its On the Run convenience stores across the United States and Canada — which will include the launch of Canadian standalone stores that will feature a strong food component based on M&M Food Market's proven capabilities.
In late January 2022, Parkland announced it was acquiring Mississauga, Ontario-based M&M Food Market, a premium, restaurant-quality frozen food retailer. The acquisition includes more than 300 standalone franchise and corporate owned stores; 2,000-plus M&M Express locations; and a rewards program with approximately 2 million active members, as Convenience Store News previously reported.
"We are advancing our customer experience concept for these stores and aim to open our first in the fall," Espey reported, adding that 2022 will also be an exciting year for the company's loyalty program.
"We will begin cross-promotional activity with M&M's active loyalty members, setting us on a path to create one of Canada's premier loyalty platforms," he said. "In the near term, our goal is to create a digital platform that seamlessly rewards our customers for their refueling, recharging convenience, and quality food purchases. Longer term, we envision a digital ecosystem that enhances and connects our customers' end-to-end experience."
Q4 & FY 2021 Financials
Parkland generated a total of $260 million of adjusted EBITDA for the fourth quarter of 2021 and $1.26 billion for the full year.
"Our core marketing segments, which are Canada, the U.S. and International, delivered record annual performance," Teunissen said, pointing out that while there is still a lingering impact from COVID-19 restrictions, Parkland is seeing signs of ongoing recovery.
By geography, Parkland's Canadian segments delivered adjusted EBITDA of $117 million, up 5 percent from the same period in 2020. Its international segment delivered adjusted EBITDA of $78 million, up more than 8 percent vs. the fourth quarter of 2020. And its U.S. segment delivered adjusted EBITDA of $41 million, up 400 percent vs. a year ago.
Parkland recently announced two acquisitions in the United States: Urbieta Oil Co. in southern Florida and Lynch Oil in Idaho, according to Teunissen.
"Since the third quarter of 2020, we have done 17 acquisitions for around $1.8 billion in aggregate. This accelerated pace of acquisitions was opportunistic, partly driven by anticipated changes in U.S. tax laws," Teunissen said. "Each transaction we did was on strategy in both the developed and diversification themes. We have also executed at attractive values and created many opportunities for synergies and growth in the future."
Calgary-based Parkland Corp. is an independent supplier and marketer of fuel and petroleum products and a convenience store operator. Parkland currently services customers across Canada, the United States, the Caribbean region and the Americas through three channels: retail, commercial and wholesale.