Canada’s Superior Plus Canwest Propane deal goes ahead
Superior Plus Corp, the Canadian LPG distributor, has completed its acquisition of Canwest Propane after receiving approval from the Competition Bureau.
Following the deal’s completion, Superior’s Canadian propane distribution business will be the largest propane distributor in Canada with:
- Annual retail and wholesale propane sales volumes in excess of 1.8 billion litres
- Approximately 200,000 customers from coast to coast
- 1,700 employees across Canada
- 262 combined distribution location
Superior’s Energy Distribution pro-forma adjusted EBITDA is approximately $200m before the anticipated synergies of at least $20m based on the trailing twelve months ended June 30, 2017.
The integration work, including detailed planning, will commence immediately.
Superior anticipates achieving run rate synergies of $15m by the end of 2018, with the remaining run rate synergies of at least $5 million to be achieved by the end of the second quarter of 2019.
Luc Desjardins, Superior’s president and chief executive said: “We are delighted to be able to combine Superior’s and Canwest’s business, enhance propane’s competitive position in the Canada’s energy market, achieve regulatory approval and still achieve the initially planned annual synergies from the transaction of at least $20 million.”
The Canadian propane industry supports 23,000 jobs, and each year generates more than $16 billion for the Canadian economy and contributes over $1 billion in taxes and royalties.
Canada produces around 11 million cubic metres of propane a year, with approximately 50% being exported. Around 85% of Canada’s supply is produced as a derivative of natural gas extraction. The remaining 15% comes from oil refining.
The cost-effectiveness of propane and its integrated infrastructure makes it the energy choice of hundreds of thousands of Canadians. Heating a home with propane can cost at least a third less than heating with electricity, while propane for vehicles typically costs around 40% less than gas and diesel.