Brookfield-backed Superior to buy Quarles Petroleum assets

Superior Plus Corp has agreed to acquire the retail propane distribution and refined fuels assets of Quarles Petroleum, a Fredericksburg, Virginia-based fuel solutions provider.

Superior Plus Corp has agreed to acquire the retail propane distribution and refined fuels assets of Quarles Petroleum, a Fredericksburg, Virginia-based fuel solutions provider. The deal, expected to close in Q2 2022, reflects a purchase price of $145 million (C$180 million). Superior, a Toronto-based energy distribution company, in 2020 secured a $260 million investment from Brookfield Asset Management.


TORONTO, March 28, 2022 (GLOBE NEWSWIRE) — Superior Plus Corp. (“Superior”) (TSX: SPB) is pleased to announce that it has entered into an agreement to acquire the retail propane distribution and refined fuels assets of Quarles Petroleum Inc. (the “Quarles Delivered Fuels Business”) for an aggregate purchase price of approximately US$145 million ($180 million) before adjustments for working capital (the “Acquisition”).
The Acquisition, which is subject to customary regulatory and commercial closing conditions, is anticipated to close in the second quarter of 2022.

Acquisition Highlights
Aligned with Superior’s core strategy of investing in high quality businesses that are in desirable geographies and that can increase Superior’s existing stable free cash flow through the realization of synergies.

Benefits retail propane customers by bringing Superior’s fuel distribution expertise, integrated platform and operational effectiveness to a new customer base.
Anticipated recurring annual EBITDA including estimated synergies of approximately US$19 million ($24 million) providing an attractive acquisition valuation.

Expected to modestly increase Superior’s 2022 Adjusted EBITDA due to the anticipated timing of the closing of the Acquisition and the seasonality of operations.

Pro forma the Acquisition and bought deal equity offering, Superior expects to immediately be within its Total Net Debt to Adjusted EBITDA target range of 3.5x to 4.0x.
Founded in 1940, the Quarles Delivered Fuels Business (“Quarles”) is an established retail propane distributor servicing approximately 55,000 residential and commercial customers primarily in Virginia. Quarles has 29 propane bulk plants, one rail terminal, approximately 3 million gallons of storage capacity, a fleet of 197 vehicles and approximately 181 employees.

On a normalized basis, including the achievement of expected synergies and weather consistent with the five-year average, Superior expects Quarles to generate approximately US$19 million ($24 million) in Adjusted EBITDA on an annual run-rate basis 24 months following the close of the Acquisition.

“We are very pleased to enter into this transaction which expands our ability to serve propane customers in Virginia,” said Luc Desjardins, Superior’s President and CEO. “Quarles is a high quality business and we look forward to welcoming the team to Superior and further improving the already outstanding customer service that Quarles provides to its customers. The acquisition of Quarles is representative of the acquisition opportunities we are seeing in the market today, and advances us further towards our previously announced 2026 EBITDA from operations growth objectives. This acquisition, coupled with the cold weather in January and February, is a good start to 2022 for Superior.”

Beth Summers, Executive Vice-President and Chief Financial Officer stated “Superior’s ability to access capital markets with strong support from our underwriters demonstrates confidence in Superior’s existing operations and the Superior Way Forward strategy. The issuance of common equity accelerates our debt reduction plan and is expected to provide us with the funding to achieve the Superior Way Forward acquisition goal of $1.9 billion in acquisitions, at a rate of approximately $250 million in acquisitions annually, while achieving our leverage target of 3.5x to 4.0x.”

Bought Deal Equity Offering
Superior has entered into an agreement with a syndicate of underwriters bookrun by CIBC Capital Markets (collectively the “Underwriters”), pursuant to which the Underwriters have agreed to purchase on a bought deal basis, an aggregate of 22,322,000 common shares (the “Shares”) at an offering price of $11.20 per Share (the “Offering Price”) for total gross proceeds to Superior of approximately $250 million (the “Offering”). Brookfield, through its Special Investments program, is participating as an anchor investor in the Offering and is committed to purchase approximately $75 million in Shares at the Offering Price. In connection with the Offering, Superior has granted the Underwriters an over-allotment option, exercisable in whole or in part, at any time for a period of 30 days following the closing of the Offering, to purchase up to an aggregate of an additional 3,348,300 Shares at the Offering Price.

The net proceeds of the Offering will be used to reduce existing indebtedness and for general corporate purposes including to fund future acquisitions.

The Offering will be made in all provinces and territories of Canada by way of a prospectus supplement (the “Prospectus Supplement”) to Superior’s base shelf prospectus dated May 25, 2021. Completion of the Offering is subject to certain conditions including receipt of all necessary approvals, including the approval of the Toronto Stock Exchange. The Offering is expected to close on or about April 6, 2022.

Further information regarding the Offering, including related risk factors, will be set out in the Prospectus Supplement that Superior expects to file on SEDAR on or before March 30, 2022. Once filed, the Prospectus Supplement will be available on Superior’s profile on SEDAR at

The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This news release does not constitute an offer to sell or the solicitation of any offer to buy, nor will there be any sale of these securities, in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such province, state or jurisdiction.

About the Corporation
Superior is a leading North American distributor and marketer of propane and distillates and related products and services, servicing over 890,000 customer locations in the U.S. and Canada. For further information about Superior, please visit our website at: