Parkland Fuel Corporation’s $1.21 Billion Acquisition of 75% of SOL Investments Limited

Walkers acted as Cayman Islands, British Virgin Islands (“BVI”) and Bermuda counsel to Parkland Fuel Corporation. Torys LLP acted as onshore Canadian counsel to Parkland Fuel Corporation.

Parkland Fuel Corporation (TSX:PKI) Canada’s largest and one of North America’s fastest growing independent marketers of fuel and petroleum products and a leading convenience store operator, and SOL Limited have entered into an agreement to complete a business combination between Parkland and SOL Investments Limited and its subsidiaries. A privately-held company owned by the Simpson Group, SOL is the largest independent fuel marketer in the Caribbean and a wholly-owned subsidiary of SOL Limited.

SOL supplies and markets a total of 4.8 billion liters of fuel volume annually across 23 countries in the Caribbean and generated US$215 million (approximately C$280 millioni) in adjusted earnings before taxes, depreciation and amortization in the 12-month period ending June 2018.

The Transaction will result in Parkland acquiring 75% of the issued and outstanding shares in the capital of SIL for total consideration of US$1.21 billion plus customary post-closing adjustments on a cash-free and debt-free basis, and SOL Limited acquiring 12.16 million common shares in the capital of Parkland. This equates to a purchase price multiple on the 75% equity interest in SOL of approximately 7.5x Adjusted EBITDA, excluding working capital. Upon closing the Simpson Group, through its ownership in SOL Limited, will own approximately 9.9% of the issued and outstanding shares in Parkland and its intention is to remain a long-term investor in Parkland. The Transaction is expected to be immediately accretive to Parkland’s distributable cash flow per share by approximately 17% (pre-synergies).

The remaining 25% of the shares outstanding in SIL are subject to the Minority Purchase/Sale Right pursuant to which Parkland may elect to acquire or SOL Limited may elect to sell the remaining shares in the capital of SIL. Based on SOL’s Adjusted EBITDA for the 12-month period ending June 2018, the Adjusted EBITDA attributable to Parkland from the 75% ownership stake in SOL would have been US$161 million, representing 75% of SOL’s Adjusted EBITDA for the period.

Walkers’ three Americas offices worked in concert on this transaction with onshore Canadian counsel Torys LLP. Across the three jurisdictions Walkers provided corporate, finance, real estate, regulatory and employment advice and co-ordinated 12 different counsel in 23 jurisdictions across the Caribbean. Cayman Islands partners Andrew Barker (corporate) and Paige Gaston-Thiery (finance) led the Cayman Islands legal team with assistance from Nick Dunne (employment), Stuart Rowe (real estate), Christopher Brett-Young (corporate), Craig McDermaid (corporate) and Sarah Dombowsky (finance). The Walkers Bermuda team was led by partner Natalie Neto (corporate) with assistance from Paul Nystrom (corporate), and the Walkers BVI team was led by partner Patrick Ormond (corporate) with assistance from Lisa Penn-Lettsome (regulatory) and Lauren Williamson (corporate).

Torys represented Parkland with a team that included Michael Akkawi (Picture), Stefan Stauder, Josh Teichman and Jesse Leonard (corporate/M&A), Omar Wakil (competition) and Ebad Rahman (commercial agreements).

Involved fees earner: Michael Akkawi – Torys LLP; Jesse Leonard – Torys LLP; Ebad Rahman – Torys LLP; Stefan Stauder – Torys LLP; Josh Teichman – Torys LLP; Omar Wakil – Torys LLP; Andrew Barker – Walkers Global; Christopher Brett-Young – Walkers Global; Sarah Dombowsky – Walkers Global; Nick Dunne – Walkers Global; Paige Gaston-Thiery – Walkers Global; Craig McDermaid – Walkers Global; Natalie Neto – Walkers Global; Paul Nystrom – Walkers Global; Patrick Ormond – Walkers Global; Lisa Penn-Lettsome – Walkers Global; Stuart Rowe – Walkers Global; Lauren Williamson – Walkers Global;

Law Firms: Torys LLP; Walkers Global;

Clients: Parkland Fuel Corporation;