The king of propane, Superior Plus, is rolling into the U.S. northeast with an $83-million (U.S.) acquisition and a consistent expansion strategy.
Superior Plus , a major fuel supplier across Canada, announced a deal Wednesday to but Sunoco's fuel distribution business in Pennsylvania and New York.
To fund the purchase, Superior Plus did a $45-million bought deal share sale led by TD Securities, Scotia Capital and National Bank Financial.
Superior Plus is a mini-conglomerate, which used its near-monolpoly in domestic propane sales to diversify into chemical and construction companies. Not all of these acquisitions have panned out, and fuel distribution remains the greatest strength of this former income trust.
That's why the decision to move into the U.S. fuel market makes sense: It plays to the strongest suit at Superior Plus. And more acquistions are likely.
"The heating oil and propane distribution business is highly fragmented throughout the north-eastern United States and eastern Canada. Superior intends to pursue additional acquisition and consolidation opportunities in the industry," said CEO Grant Billing in a press release Wednesday.
The Superior Plus bought deal was done at $11.35 a share, a 4 per cent discount to where the stock was trading on Tuesday, prior to the financing.Report Typo/Error