major fuel deal
A major development has taken place in the fuel distribution business in Barbados and the Caribbean. Parkland Fuel Corporation, a Canadian independent marketer of fuel products, has entered an agreement with SOL Investment Limited (SIL).
The transaction will see Parkland acquiring 75 per cent of the issued and outstanding shares in the capital of SIL for US$1.21 billion (Bds$2.42 billion), plus customary post-closing adjustments on a cash-free and debt-free basis. In addition, SOL Limited will be acquiring 12.16 million common shares in the capital of Parkland .
“Upon closing, the Simpson Group, through its ownership in SOL Limited, will own approximately 9.9 per cent of the issued and outstanding shares in Parkland,” according to a statement issued on the transaction. The intention of SOL Limited is to remain a long-term investor in Parkland.
The remaining 25 per cent of the shares outstanding in SIL are subject to the Minority Purchase/Sale Right pursuant to which Parkland may elect to acquire or SOL Limited may elect to sell.
Currently SOL supplies and markets a total of 4.8 billion litres of fuel annually across 23 countries in Barbados and the Caribbean, and generated Bds$430 million (US$215 million) in adjusted pre-tax earnings in the 12 months ended June 2018.
The statement said that based on SOL’s adjusted pre-tax earnings for the period to June this year, the adjusted pre tax results attributable to Parkland from the 75 per cent ownership stake in SOL would have been Bds$322 million (US$161 million), representing the 75 per cent of SOL’s earnings by June.
Parkland’s CEO Bob Espey said the addition of SOL will extend their global supply reach and enable “us to continue to build our supply advantage to benefit our entire business.
“With its integrated supply chain backed by an extensive distribution network, fortress assets, a premier brand portfolio and an exceptional team, SOL has built a strong market position with unparalleled scale,” Espey said, noting that together they form a significant North American and Caribbean growth platform.
Sir Kyffin Simpson, founder of SOL Limited, said he is exceptionally pleased to announce the coming together of Parkland and SOL, which will ensure a dynamic future for everyone. “With a desire to continue to develop and grow the business through expansion in new areas, I am extremely blessed to bring in our good friends, Parkland of Canada, to the Caribbean,” Sir Kyffin said.
He stated that he had long admired Parkland as a company with their futuristic vision and energy, and is impressed with Bob Espey’s leadership along with his management team.
Sir Kyffin said further that with 43 million people and a GDP of more than Bds$400 billion (US$200 billion), “this is the perfect time to take advantage of the tremendous opportunities that abound in the Caribbean”.