RED DEER, Alta.—Parkland Fuel Corp. is acquiring gas station operator Pioneer Energy in a deal valued at $378 million, including $259 million in cash and $119 million in Parkland common shares, well as the assumption of standard operating liabilities.
Pioneer operates 393 gas stations under the Esso and Pioneer brands throughout Ontario and Manitoba and a recently acquired commercial operation in Ontario, New Brunswick and Nova Scotia.
The purchase will increase Parkland’s total number of gas stations to more than 1,000, the Alberta-based fuel distributor and marketer said in a statement Wednesday after markets closed.
The Pioneer business represents 5.1 per cent of total retail fuel sales across Canada and a 12 per cent share of the Ontario and Manitoba retail markets.
One of Pioneer’s current joint owners, the Pioneer Group Inc., will receive $76 million or 39 per cent of its total consideration in cash and $119 million or 61 per cent Parkland shares. One third of the common shares will be subject to a one-year minimum holding period and the remaining two thirds a two-year minimum holding period.
The other owner, Suncor Energy Inc. will receive $183 million in cash.
“We have long recognized the Ontario retail marketplace as a critical growth opportunity for Parkland, aligning with Parkland’s overarching supply strategy,” president and CEO Bob Espey said in a statement.
“We also recognize Pioneer Energy as one of Canada’s most respected independent retail fuel marketers, having built Pioneer into the strongest independent retail fuel brand in Ontario. Given the Pioneer Group’s sophisticated understanding of the retail fuel industry, their investment in Parkland is a strong endorsement of our strategy and we look forward to welcoming their team,” Espey said.