Parkland could be looking at urban centers in Canada or in the Northern Plains states when it is ready for its next acquisition.
Canada-based Parkland Corp. has embarked on a number of acquisitions —18 deals to be exact valued at more than $2.4 billion in the past six years. In the past year and a half alone, the acquisitions include locations from Chevron Corp., Imperial Oil Ltd. and CST Brands.
Calgary Herald reported that Bob Espey who became chief executive of Parkland in 2011, could be considering an expansion into the U.S. in the future.
“We do have a toehold in the U.S., which is a market that we’re certainly interested in,” Espey told the Calgary Herald, pointing to the few operations Parkland has in the Northern Plains states. He also said the company has room to expand in Canada’s urban centers.
Parkland has been able to acquire locations inexpensively because major oil companies are eager to sell their gas stations and repair balance sheets that were weakened during the recent oil-price downturn. Parkland paid about 6.3 times earnings before interest, taxes, depreciation and amortization in last month’s $1.46-billion takeover of Chevron’s downstream business in Canada, the Calgary Herald reported.
Parkland plans to take the next 12-24 months to work with its recent purchases and pay down debt, Espey said. The company now holds about a 16% share of the gasoline market in Canada, up from about 5% in 2012. Parkland also runs wholesale operations and enterprises that sell lubricants, propane and other fuels to businesses and homeowners. Retail fuels accounted for only 44% of Parkland’s revenue last year.
Espey said his next acquisition could be in one of those less-visible markets, possibly in propane in Canada. But time will tell, if the chain considers retail acquisitions in the U.S.