NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES
Superior Plus Corp. (“Superior”) (TSX:SPB) announced today that
an indirect wholly-owned subsidiary of Superior has completed the
previously announced acquisition of NGL Propane, LLC (“NGL Propane”),
NGL Energy Partners LP’s retail propane distribution business (the “Transaction”).
“We are pleased to be completing this significant transaction early in
the third quarter and are eager to commence combining the best of
Superior and NGL Propane in order to achieve anticipated annual run-rate
synergies of US$20 million to US$25 million,” said Luc Desjardins,
President and Chief Executive Officer of Superior. “We look forward to
implementing our industry leading digital strategy and operating
platform to further enhance the customer experience for our customers.”
Andy Peyton, President of Superior’s U.S. propane distribution business
added, "I am excited to welcome NGL Propane, its people and its partners
to the Superior Plus Propane family. The combination of these two
propane companies creates a strong platform and reflects the hard work
and contributions of many employees from both organizations.”
Superior will update its 2018 Financial Outlook for Adjusted Operating
Cash Flow (“AOCF”) per share and Adjusted EBITDA guidance
concurrently with the release of its Q2 2018 financial results.
Summary of Acquired Business:
-
Over 316,000 residential, commercial and industrial customers;
-
1,150 employees in 151 locations (including 61 satellite distribution
locations);
-
A fleet in excess of 1,000 trucks servicing 21 states in the Northeast
U.S., Southeast U.S. and Upper Midwest U.S. and the District of
Columbia;
-
Prominent regional brands, including Osterman Propane, Downeast
Energy, Eastern Propane, Atlantic Propane, Anthem Propane, Gas Inc.
and Brantley Gas;
-
Sales volumes of approximately 182 million gallons of fuel, generating
approximately US$85 million (Cdn$111 million) in Fiscal 2018 Adjusted
EBITDA; and
-
After adjusting for the pro forma impact of acquisitions completed
during fiscal 2018, Normalized EBITDA estimated to be approximately
US$90 million (Cdn$117 million).
The purchase price for the Transaction was approximately US$900 million,
excluding transaction costs, and subject to customary closing
adjustments. The Transaction was financed through a combination of debt
and equity, including Superior’s recently completed United States and
Canadian debt offerings of US$350 million and C$150 million aggregate
principal amount of senior unsecured notes, respectively, the net
proceeds of Superior’s recent bought deal offering of subscription
receipts (the “Subscription Receipts”) and borrowings under
Superior’s existing credit facilities.
In accordance with the terms of the agreement pursuant to which the
Subscription Receipts were issued, each outstanding Subscription Receipt
will be exchanged, for no additional consideration or action on the part
of the holder, for one common share of Superior (the “Shares”),
resulting in the issuance of 32,000,000 Shares and a cash payment equal
to $0.06 per Subscription Receipt, less any withholding taxes, which
will be paid on July 13, 2018. The cash payment is equal to the
aggregate amount of dividends per Share for which record dates occurred
since the issuance of the Subscription Receipts.
Superior expects that the Subscription Receipts will be halted from
trading as soon as possible and delisted from the Toronto Stock Exchange
(“TSX”) after the close of markets today and that the Shares
issued in exchange for the Subscription Receipts will immediately
commence trading on the TSX.
Forward-Looking Statements
Certain information included in this news release is forward-looking,
within the meaning of applicable Canadian securities laws.
Forward-looking information is often, but not always, identified by the
use of words such as “anticipate”, “believe”, “could”, “estimate”,
“expect”, “plan”, “intend”, “forecast”, “future”, “guidance”, “may”,
“predict”, “project”, “should”, “strategy”, “target”, “will” or similar
words or phrases suggesting future outcomes or language suggesting an
outlook. Forward-looking information in this news release includes
management’s expectations, intentions and beliefs concerning anticipated
future events, results, circumstances, economic performance or
expectations with respect to Superior, including Superior’s business
operations, business strategy and financial condition and anticipated
synergies from the Transaction. Superior believes the expectations
reflected in such forward-looking information are reasonable but no
assurance can be given that these expectations will prove to be correct
and such forward-looking statements should not be unduly relied upon.
Forward-looking information herein is based on various assumptions and
expectations that Superior believes are reasonable in the circumstances.
No assurance can be given that these assumptions and expectations will
prove to be correct. Those assumptions and expectations are based on
information currently available to Superior including the historic
performance of Superior’s businesses and those of NGL Propane.
Forward-looking information is not a guarantee of future performance. By
its very nature, forward-looking information involves inherent
assumptions, risks and uncertainties, both general and specific, and
risks that predictions, forecasts, projections and other forward-looking
information will not be achieved, including the risks identified under
the heading “Risk Factors” in Superior’s current annual information
form, management’s discussion and analysis and prospectus supplement
dated June 1, 2018 (the “Prospectus Supplement”) all of which are
available under Superior’s profile at www.sedar.com.
The preceding list of risks and uncertainties is not exhaustive. Should
one or more of these risks and uncertainties materialize, or should
assumptions described above prove incorrect, Superior’s actual
performance and results in future periods may differ materially from any
projections of future performance or results expressed or implied by
such forward-looking information. We caution readers not to place undue
reliance on this information as a number of important factors could
cause the actual results to differ materially from the beliefs, plans,
objectives, expectations and anticipations, estimates and intentions
expressed in such forward-looking information. Forward-looking
information contained in this news release is provided for the purpose
of providing information about management’s goals, plans and range of
expectations for the future and may not be appropriate for other
purposes. Any forward-looking information is made as of the date hereof
and, except as required by law, Superior does not undertake any
obligation to publicly update or revise such information to reflect new
information, subsequent or otherwise.
Non-GAAP Financial Measures
Superior has used the following terms that are not defined by generally
accepted accounting principles (“GAAP”), but are used by
management to evaluate the performance of Superior and its business.
Since Non-GAAP financial measures do not have standardized meaning
prescribed by GAAP and are therefore unlikely to be comparable to
similar measures presented by other companies, securities regulations
require that Non-GAAP financial measures are clearly defined, qualified
and reconciled to their nearest GAAP financial measures. Except as
otherwise indicated, these Non-GAAP financial measures are calculated
and disclosed on a consistent basis from period to period. Specific
adjusting items may only be relevant in certain periods.
The intent of Non-GAAP financial measures is to provide additional
useful information to investors and analysts and the measures do not
have any standardized meaning under International Financial Reporting
Standards as adopted by the International Accounting Standards Board (“IFRS”).
The measures should not, therefore, be considered in isolation or used
in substitute for measures of performance prepared in accordance with
IFRS. Other issuers may calculate Non-GAAP financial measures
differently.
Investors should be cautioned that AOCF, Adjusted EBITDA and Fiscal 2018
Adjusted EBITDA should not be construed as alternatives to cash flow
from operating activities, net earnings or other measures of financial
results determined in accordance with GAAP as an indicator of Superior’s
or NGL Propane’s performance.
Superior Non-GAAP Financial Measures
Adjusted Operating Cash Flow
AOCF is equal to cash flow from operating activities as defined by IFRS,
adjusted for changes in non‐cash working capital, other expenses,
non‐cash interest expense, current income taxes and finance costs.
Superior may deduct or include additional items in its calculation of
AOCF; these items would generally, but not necessarily, be items of a
non‐recurring nature. AOCF is the main performance measure used by
management and investors to evaluate Superior’s performance. AOCF
represents cash flow generated by Superior that is available for, but
not necessarily limited to, changes in working capital requirements,
investing activities and financing activities of Superior. Please see
the “Adjusted Operating Cash Flow Reconciled to Net Cash Flow from
Operating Activities” section of Superior’s Q1 2018 MD&A.
Adjusted EBITDA
Adjusted EBITDA represents earnings before taxes, depreciation,
amortization, finance expense, and certain other non-cash expenses and
transaction and other costs deemed to be non-recurring, and is used by
Superior to assess its consolidated results and ability to service debt.
The EBITDA of Superior’s operating segments may be referred to as EBITDA
from operations. Please see the “Reconciliation of Net Earnings before
Income Taxes to Adjusted EBITDA” section of Superior’s Q1 2018 MD&A.
NGL Propane Non-GAAP Financial Measures
Fiscal 2018 Adjusted EBITDA
Fiscal 2018 Adjusted EBITDA for NGL Propane is defined as fiscal 2018
net income attributable to the retail propane business of NGL Energy
Partners LP as per US GAAP adjusted for depreciation and amortization,
loss or gain on disposal of assets, equity-based compensation expense,
interest expense and net income attributable to the 40% redeemable
non-controlling interest in Atlantic Propane acquired as part of
completion of the Transaction. Adjusted EBITDA for NGL Propane may be
used by management and investors to assess the historical results of
operations of NGL Propane on a basis that excludes items that may not be
indicative of the core operating results of NGL Propane’s business. For
a reconciliation of NGL Propane’s Adjusted EBITDA to its nearest US GAAP
measure, please see “Appendix: NGL Propane EBITDA Reconciliation” in the
investor presentation which is incorporated by reference in the
Prospectus Supplement.
Normalized EBITDA
Normalized EBITDA represents Fiscal 2018 Adjusted EBITDA for NGL Propane
for the fiscal year ended March 31, 2018 further adjusted to reflect the
pro forma impact of acquisitions completed in the twelve months ending
March 31, 2018, assuming NGL Propane had completed such acquisitions on
the first day of such period. Normalized EBITDA for NGL Propane may be
used by management and investors to assess the historical results of
operations of NGL Propane on a basis that excludes items that may not be
indicative of the core operating results of NGL Propane’s business.
Normalized EBITDA is based on certain assumptions and estimates, is
presented for illustrative purposes only, and should not be considered
to be an indication of NGL Propane’s future results of operations
following the completion of such acquisitions. For a reconciliation of
NGL Propane’s Normalized EBITDA to its nearest US GAAP measure, please
see “Appendix: NGL Propane EBITDA Reconciliation” in the investor
presentation incorporated by reference in the Prospectus Supplement.
About Superior Plus Corp.
Superior consists of two primary operating businesses: Energy
Distribution includes the distribution of propane and distillates, and
supply portfolio management; and Specialty Chemicals includes the
manufacture and sale of specialty chemicals.
For further information about Superior and the Transaction, please visit
our website at: www.superiorplus.com
or contact: Beth Summers, Executive Vice President and Chief Financial
Officer, Tel: (416) 340-6015, or Rob Dorran, Vice President, Investor
Relations and Treasurer, Tel: (416) 340-6003, E-mail: investor-relations@superiorplus.com,
Toll Free: 1-866-490-PLUS (7587).
About NGL Propane, LLC
NGL Propane’s business consists of the retail marketing, sale and
distribution of propane and distillates to residential, agricultural,
commercial and industrial customers in the Northeast U.S., Southeast
U.S. and Upper Midwest U.S.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180710005620/en/
Copyright Business Wire 2018