Bluewave Energy delivers heating oil, diesel fuel, gasoline, lubricants, and related products to residential customers and commercial customers in the agriculture, transportation, construction [image-nocss] and upstream oil and gas sectors. It also sells, services and finances heating, air conditioning, water heating and fuel storage equipment. In total, Bluewave Energy services more than 72,000 customers via a fleet of 185 delivery trucks.
In 2008, Bluewave Energy had total sales volume of 645 million liters. Bluewave is privately held by Birch Hill Equity Partners, Bluewave executives and employees and a group of founding investors.
With this acquisition, Parkland becomes the largest national independent petroleum distributor in Canada with a solid delivery network and sales in all provinces except Newfoundland.
The transaction, which is subject to the receipt of all necessary third-party and regulatory approvals including approval under the Competition Act and from the TSX, is expected to close around the end of January 2010.
Parkland president and CEO Mike Chorlton said, "With this transaction, we are adding one of Canada's leading independent fuel distributors to our portfolio, expanding our geographic footprint into Atlantic Canada, strengthening our position in Ontario and Western Canada, and further balancing our product mix. The acquisition of Bluewave Energy is consistent with our strategy of driving sustainable growth in fuel volumes and cash flow, primarily in non-urban markets, while maintaining strength in our balance sheet."
Upon the completion of the acquisition, Parkland intends to integrate the Bluewave Energy team into the operations of the combined business. Bill Sanford, Bluewave Energy's current president and CEO, will become the president of Parkland's Bluewave Division.
The acquisition of Bluewave Energy is expected to be immediately accretive to earnings and cash flow on a per unit basis. The transaction provides Parkland with significant growth in fuel volume, both immediately and through a robust pipeline of potential future acquisitions. It expands Parkland's geographic reach into Atlantic Canada and improves the Fund's overall geographic and customer diversity. The acquisition will also increase Parkland's total purchasing volume, which is expected to give rise to additional cost saving opportunities.
Red Deer, Alberta-based Parkland Income Fund currently operates retail and wholesale fuels and convenience store businesses under its Fas Gas Plus, Fas Gas, Race Trac Fuels and Short Stop Food Stores brands and through independent branded dealers, and transports fuel and other products through its distribution division. With approximately 612 locations, Parkland has developed a market niche in Canadian non-urban markets focused in the West and Ontario.
The fund supplies propane, bulk fuel, heating oil, lubricants, industrial fluids, agricultural inputs and associated services to commercial and industrial customers in Alberta, British Columbia and the Yukon Territory under the Neufeld, United Petroleum, Columbia Fuels and Great Northern Oil brands. Additionally, Parkland operates the Bowden refinery near Red Deer as a storage and contract processing site.
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