Skip to main content
Welcome to
super saver spring
offer ends april 20
save over $140
save over 85%
$0.99
per week for 24 weeks
Welcome to
super saver spring
$0.99
per week
for 24 weeks
// //

Superior has acquired five propane businesses in the past six months.

Superior Plus Corp. delivered on a two-year-old promise to focus the company on propane distribution on Thursday by selling its chemical business for $725-million to private equity fund manager Birch Hill Equity Partners.

Toronto-based Superior put its chemical division up for sale the spring of 2019 as part of a strategic decision to focus on the propane industry. The company acquired the business, which sells industrial chemicals used in pulp and paper and water treatment, in 2002 for $375-million. At the time of the purchase, Superior faced challenges from Canada’s competition regulator over plans to expand its domestic propane business. The company has since responded by expanding into the United States, making a series of acquisitions, many of which were financed with debt.

“The sale of specialty chemicals is an important component of our strategic plan and provides us with additional capital to further accelerate our accretive growth strategy in the U.S. propane market,” said Luc Desjardins, chief executive of Superior Plus, in a news release on Thursday. Superior is expected to use some of the money from the sale to pay down debt. Investment bank Barclays advised Superior on the sale.

Story continues below advertisement

Superior sold the chemical division for 5.5 times the unit’s earnings before interest, taxes, depreciation and amortization, or EBITDA, which analysts said was a “low” price, but a positive step for the company.

“The removal of an underperforming, volatile, non-ratable, commodity chemical business should give a meaningful lift to Superior,” Scotia Capital analyst Ben Isaacson said in a report. “While the exit multiple of 5.5 times [EBITDA] could have been higher, what ultimately matters is the impact to Superior shareholders, which we think is a net positive.”

Superior has acquired five propane businesses in the past six months, including companies in California, Maine, Massachusetts, Mont Tremblant, Que., and Fenelon Falls, Ont. Last July, the company raised $350-million to fund its growth plans by selling preferred shares to a unit of Brookfield Asset Management Inc.

Toronto-based Birch Hill focuses on investments in mid-market consumer-facing and industrial companies, with holdings that include Montreal-based CCM Hockey, Mastermind Toys, based in Toronto, and leading North American pet food and automotive paint manufacturers. Last February, Birch Hill raised $1.7-billion in its sixth fund. Toronto-Dominion Bank spun out its private equity arm as Birch Hill back in 2005, with former bank employees buying the asset manager.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies