Parkland Fuel Corp. recently announced that it has entered into an agreement to acquire the entities and assets comprising Kellerstrass Oil Co. through its wholly owned US subsidiaries, collectively Parkland USA.
Based in Salt Lake City, US, Kellerstrass is a regional retail dealer and commercial fuel business. In addition to highly efficient trucking, routing and distribution practices, Kellerstrass brings a strategic 17-car rail spur and storage assets, commercial card locks and an 84-location dealer business. Kellerstrass will help to strengthen Parkland’s existing Rockies Regional Operating Centre.
Doug Haugh, President of Parkland USA, said: “We continue to deliver on our growth strategy and expand our US footprint […] this acquisition is expected to support the growth of our North America diesel platform, create supply efficiencies and deliver logistical benefits. The company is delighted to enter the Idaho market and expand our presence in Wyoming.”
This acquisition is at valuation metrics consistent with Parkland’s prior US transactions and will be funded out of existing credit facility capacity.
Pro forma the acquisition, reflecting the company’s previously disclosed 3Q19 results and subsequent acquisition of the assets of Mort Distributing Inc. and its affiliates, Parkland expects annual run-rate adjusted EBITDA of approximately CAN$70 million for its US segment. The transaction is subject to customary closing conditions and is expected to close in 1Q20.