Mergers & Acquisitions

Parkland, Federated Co-operatives Split Up 337 Husky Stations

Cenovus sells retail network for combined total cash proceeds of $420 million
Photograph: Shutterstock

CALGARY, Alberta — Parkland Corp. and Federated Co-operatives Ltd. (FCL) have entered into separate deals to acquire a total of 337 Husky gas station and convenience stores from Cenovus Energy Inc. for combined total cash proceeds of nearly $420 million. Parkland has agreed to acquire 156 locations, and FCL has agreed to purchase 181 sites.

Cenovus, Calgary, Alberta, is an integrated energy company with oil and natural gas production operations in Canada and the Asia Pacific region and refining and marketing operations in Canada and the United States. Cenovus is retaining its commercial fuels business, which includes approximately 170 cardlock, bulk plant and travel center locations.

Cenovus completed a strategic combination with Husky Energy Inc. in January 2021. Cenovus intends the sales to allow it to further focus its portfolio, accelerate deleveraging and support increasing shareholder returns, it said.


For Parkland, the transaction—which adds sites in Vancouver and Vancouver Island in British Colombia; Calgary, Alberta; and the Toronto area in Ontario—includes 109 company-owned sites and 47 dealer locations. Parkland said it will convert a significant number of the company-owned sites to On the Run and accelerate its plan to build a network of more than 1,000 On the Run locations in Canada and the U.S. by 2025.

The company expects to add annual fuel volumes of approximately 105.67 million gallons to its network.

“This acquisition is a natural fit for Parkland,” said Donna Sanker, president of Parkland Canada. “Consistent with our recently announced strategy to develop our retail network in key Canadian markets and diversify our retail business to better serve our customers, it provides an opportunity to create convenience destinations by expanding our On the Run convenience brand, enhancing food offerings and strengthening the Parkland national network for Journie Rewards.”

She added, “The acquisition is a unique opportunity to expand our coverage in markets where Parkland has an existing supply advantage and offsets a portion of our planned organic growth capital.”

The total cash consideration for this transaction is approximately $156 million and reflects a post-synergy multiple consistent with certain prior transactions of approximately five times, according to the company. The companies expect the deal, subject to approval under the Canadian Competition Act and other closing conditions, to close in mid-2022.

Calgary-based Parkland is a consolidator and operator of convenience retail and fuel marketing businesses. It services customers in Canada, the United States, the Caribbean and the Americas through retail, commercial and wholesale channels. It is the second largest c-store operator in Canada with 650 retail outlets and more than 1,830 dealer sites.

Under Charleston, S.C.-based Parkland USA, Parkland has operations in 13 mostly Western states, with more than 100 c-stores. In late 2020, Parkland USA acquired the license for the exclusive use of the On the Run brand in most of the United States.

Federated Co-operatives

In its biggest retail acquisition ever, Federated Co-operatives Ltd. (FCL), on behalf of its local Co-ops, agreed to acquire 181 Husky retail fuel sites—a mix of gas bars and c-stores—from Cenovus for $264 million.

Once the deal is complete, FCL will transfer the sites to several independent local Co-ops across Western Canada.

The purchase includes both corporate-owned and dealer-owned and -operated sites, as well as on-site car washes in some locations. Some sites will be operated by local Co-ops while others will be operated by dealers under FCL’s Tempo brand. Some sites may require remediation as they are reaching the end of their life cycle. FCL has remediation processes and procedures in place, and the company factored the need for site remediation into the analysis and decision to purchase the sites. Local Co-ops may begin operations immediately after the companies complete the deal; however, the rebranding process from Husky to Co-op is expected to take about 18 months to complete.

“This historic deal for our organization clearly aligns with our vision of building sustainable communities together and reaffirms our commitment to Western Canada, to our member-owned Co-ops and to their local members and customers,” said FCL CEO Scott Banda. “By increasing our retail footprint, we further strengthen our position to meet the needs of our local Co-ops and their communities into the future. … Co-op is an integral part of so many neighborhoods and communities. We're looking forward to extending our reach, and continuing to fuel Western Canada, through this deal.”

The purchase is subject to certain customary closing conditions, including clearance by the Canadian Competition Bureau, and the company expects it to close in mid-2022.

FCL, based in Saskatoon, Saskatchewan, provides more than 160 local Co-ops across Western Canada with strategy and leadership, wholesaling, manufacturing, logistics, operational support, business-enabling services and marketing support. FCL and these local co-operatives form the Co-operative Retailing System (CRS). A workforce of 24,000 employees serves 1.9 million active individual members and more non-member customers at 1,500 retail locations in more than 620 communities.

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