Parkland Fuel Agrees To Buy Pioneer Energy

(RTTNews) - Parkland Fuel Corp. (PKI.TO), a distributor and marketer of fuels and lubricants, Wednesday said it has entered into a definitive agreement to acquire the assets of Pioneer Energy for C$378 million, including C$259 million in cash, C$119 million in common shares of Parkland, and the assumption of standard operating liabilities.

According to the company, at 6.9 times Pioneer's trailing twelve month Earnings Before Interest, Tax, Depreciation and Amortization or EBITDA of approximately C$55 million, this acquisition is both accretive and attractively priced for a premier retail fuel network.

Pioneer's current joint owners are The Pioneer Group Inc. and Suncor Energy Inc. (SU.TO, SU).

The Pioneer Group Inc. will receive C$76 million or 39 percent of their total consideration in cash and C$119 million or 61 percent of their total consideration in common shares of Parkland. Suncor Energy will receive C$183 million in cash.

One third of the common shares held by Pioneer will be subject to a one year minimum holding period, and the remaining two thirds are subject to a two year minimum holding period.

Parkland said its existing credit facility can be utilized to fund the cash consideration of the acquisition.

PKI.TO closed up 0.4 percent on Wednesday at C$20.00.