Calgary, Alberta-based fuel marketer and convenience retailer Parkland Corp. has initiated a strategic review of the company to identify opportunities to maximize value for all shareholders. This could include asset divestments, acquisitions, transformative business combinations and a sale of the company.
"Parkland’s board remains committed to acting in the best interests of all shareholders,” said Michael Jennings, chair of Parkland’s board of directors. “While we are confident in the tremendous value creating potential of our business, strategic plan and management’s ability to execute, the current share price does not fully reflect the intrinsic value of the company. As a result, our board believes the strategic review is a necessary step to explore opportunities to maximize value creation for all shareholders. We are openly inviting Simpson Oil to rejoin the company’s board and participate on the special committee.”
Parkland’s largest shareholder, Simpson Oil Ltd., had called for a strategic review in April 2024. Simpson Oil initiated litigation against Parkland in August over the status of their governance agreement, which has since been settled in court. Simpson Oil’s nominees to Parkland’s board left the board of directors in January 2024.
During the review process, the company will analyze and evaluate its business strategy and optimization opportunities, Parkland said. The strategic review will be led by a special committee of the board that is comprised of independent directors. Parkland has engaged Goldman Sachs Canada Inc. and BofA Securities as its financial advisors for the review.
Parkland Corp. is No. 38 on CSP’s 2024 Top 202 ranking of U.S. convenience-store chains by store count.
There are no guarantees as to whether this strategic review process will result in a transaction or what the timing of that transaction would be, Parkland said. It will continue to engage with its shareholders through the process, Parkland said, and “provide periodic updates on its progress.”
Fourth-Quarter 2024 Earnings
Parkland shared the news Wednesday in its fourth-quarter earnings report for the period ending Dec. 31.
It reported adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $298.53 million (U.S.) for fourth-quarter 2024, as compared to $322.92 million in fourth-quarter 2023. It had a net loss of $20.23 million (12 cents per share, basic) as compared to net earnings of $59.98 million (34 cents per share, basic) in fourth-quarter 2023.
Parkland USA delivered adjusted EBITDA of $22.32 million in fourth-quarter 2024 compared to $27.2 million in fourth-quarter 2023. Full-year results for Parkland USA “fell below expectations as unfavorable market conditions negatively impacted industry volumes and margins, overshadowing Parkland’s integration and optimization efforts,” the company said.
Its full year adjusted EBITDA was $1.18 billion for 2024 compared to $1.33 billion in 2023.
“As the company initiates a strategic review, I want to thank the Parkland team for their dedication in 2024 and their continued focus on serving our customers,” said Bob Espey, Parkland Corp. president and CEO. “The team made great progress executing our priorities and building a platform for growth during the year. In 2024, our combined retail and commercial businesses demonstrated resilience in a challenging environment. While the Refinery and USA segments fell short of our expectations, partly due to unfavorable external market factors, our continued focus on operational excellence and serving our customers, combined with higher expected composite utilization of the Burnaby Refinery, gives me confidence in our 2025 guidance.”
Parkland Corp., Calgary, Alberta, has 210 company-operated c-stores in the United States under Parkland USA, with about 450 dealer sites. It has about 4,000 retail and commercial locations total. Its retail brands include On the Run. In September, it said it would sell its struggling Florida retail and commercial businesses.
Parkland has had several leadership changes over the past year. It combined its commercial and retail operations in the United States and international regions under Sanker in July. Then in December, it said its CFO Marcel Teunissen would transition to the role of president, North America, on Jan. 1. Also, in 2025, it expects to complete its previously announced divestment program, which it expects to exceed $355.4 million in sales of noncore assets.
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