What Parkland Will Gain From CST Acquisition
RED DEER, Alberta — While the Alimentation Couche-Tard Inc. announced acquisition of CST Brands Inc. has generated plenty of headlines, Parkland Fuel Corp. is a company that stands to gain from this transaction as well, including adding retail assets branded under the Ultramar name.
Assuming the Couche-Tard-CST deal is approved by shareholders and U.S. and Canadian government authorities, Parkland will acquire much of CST’s Canadian assets for $965 million. These assets include:
- CST’s dealer and commissioned agents retail business;
- CST’s commercial cardlock business;
- CST’s commercial and home heat businesses;
- A number of CST’s company-operated stores to be determined following the Competition Bureau of Canada’s review of the CST transaction; and
- Corporate presence in Montreal.
“This highly-accretive acquisition extends Parkland's network coverage with a premier fuel network in Québec and Atlantic Canada and enhances our presence in Ontario. We expect pre-synergy accretion of over 20 percent to distributable free cash flow per share on a trailing 12-months basis as of June 30,” said Bob Espey, President and CEO of Parkland.
“CST is a prominent fuel marketer in North America with a strong reputation for quality customer service. The acquisition allows Parkland to add the Ultramar brand, which is one of the most recognized retail fuel brands in Québec and Atlantic Canada. We look forward to welcoming the Canadian CST employees, agents and dealers to the Parkland team as we will be looking to leverage their deep expertise and knowledge of these markets," he added.
Parkland stated it is specifically excited that this purchase will allow it grow its retail business. Specifically, the company said the Canadian CST assets acquisition will advance its retail division by “becoming Canada’s leading fuel retailer with more than 1,555 sites in communities across Canada,” and expanding “Parkland’s retail geographic coverage and creates critical mass in Québec and Atlantic Canada.”
The Couche-Tard-CST acquisition, as well as the subsequent Parkland transaction are expected to be completed in 2017’s first quarter.
Red Deer-based Parkland Fuel Corp. is one of North America’s fastest-growing independent marketers of fuel and petroleum products.