Superior Plus Completes Acquisition of NGL’s Retail Propane Business

Source Press Release
Company Superior Plus CorpNGL Energy Partners LP 
Tags Corporate Deals, Deals, Refining & Marketing Activities
Date July 10, 2018

Superior Plus Corp. (“Superior”) (TSX:SPB) announced today that an indirect wholly-owned subsidiary of Superior has completed the previously announced acquisition of NGL Propane, LLC (“NGL Propane”), NGL Energy Partners LP’s retail propane distribution business (the “Transaction”).

“We are pleased to be completing this significant transaction early in the third quarter and are eager to commence combining the best of Superior and NGL Propane in order to achieve anticipated annual run-rate synergies of US$20 million to US$25 million,” said Luc Desjardins, President and Chief Executive Officer of Superior. “We look forward to implementing our industry leading digital strategy and operating platform to further enhance the customer experience for our customers.”

Andy Peyton, President of Superior’s U.S. propane distribution business added, "I am excited to welcome NGL Propane, its people and its partners to the Superior Plus Propane family. The combination of these two propane companies creates a strong platform and reflects the hard work and contributions of many employees from both organizations.”

Superior will update its 2018 Financial Outlook for Adjusted Operating Cash Flow (“AOCF”) per share and Adjusted EBITDA guidance concurrently with the release of its Q2 2018 financial results.

Summary of Acquired Business:

  • Over 316,000 residential, commercial and industrial customers;
  • 1,150 employees in 151 locations (including 61 satellite distribution locations);
  • A fleet in excess of 1,000 trucks servicing 21 states in the Northeast U.S., Southeast U.S. and Upper Midwest U.S. and the District of Columbia;
  • Prominent regional brands, including Osterman Propane, Downeast Energy, Eastern Propane, Atlantic Propane, Anthem Propane, Gas Inc. and Brantley Gas;
  • Sales volumes of approximately 182 million gallons of fuel, generating approximately US$85 million (Cdn$111 million) in Fiscal 2018 Adjusted EBITDA; and
  • After adjusting for the pro forma impact of acquisitions completed during fiscal 2018, Normalized EBITDA estimated to be approximately US$90 million (Cdn$117 million).

The purchase price for the Transaction was approximately US$900 million, excluding transaction costs, and subject to customary closing adjustments. The Transaction was financed through a combination of debt and equity, including Superior’s recently completedUnited States and Canadian debt offerings of US$350 million and C$150 million aggregate principal amount of senior unsecured notes, respectively, the net proceeds of Superior’s recent bought deal offering of subscription receipts (the “Subscription Receipts”) and borrowings under Superior’s existing credit facilities.

In accordance with the terms of the agreement pursuant to which the Subscription Receipts were issued, each outstanding Subscription Receipt will be exchanged, for no additional consideration or action on the part of the holder, for one common share of Superior (the “Shares”), resulting in the issuance of 32,000,000 Shares and a cash payment equal to $0.06 per Subscription Receipt, less any withholding taxes, which will be paid on July 13, 2018. The cash payment is equal to the aggregate amount of dividends per Share for which record dates occurred since the issuance of the Subscription Receipts.

Superior expects that the Subscription Receipts will be halted from trading as soon as possible and delisted from the Toronto Stock Exchange (“TSX”) after the close of markets today and that the Shares issued in exchange for the Subscription Receipts will immediately commence trading on the TSX.

Source: EvaluateEnergy® ©2018 EvaluateEnergy Ltd