TORONTO, May 30, 2018 (GLOBE NEWSWIRE) -- Superior Plus Corp. (“Superior”) (TSX:SPB) is pleased to announce that it has entered into an agreement with NGL Energy Partners LP (“NGL Energy”) (NYSE:NGL) to acquire all of the outstanding equity interest in NGL Propane, LLC (“NGL Propane”), NGL Energy’s retail propane distribution business, for total cash consideration of US$900 million (Cdn$1.17 billion) subject to customary closing adjustments (the “Transaction”).

“The acquisition of NGL Propane is a highly strategic and transformative transaction for Superior and represents an exciting opportunity to leverage our current core competencies and integrated supply capacities with NGL Propane’s strong Eastern U.S. retail platform,” said Luc Desjardins, CEO of Superior. “The acquisition of NGL Propane significantly expands our U.S. propane distribution business and solidifies Superior as a leading North American propane distributor. I am looking forward to working with the management and employees of NGL Propane and the many brands it operates under.

Transaction Highlights

Strategically Compelling

  • Aligned with Superior’s core strategy of investing in established businesses that are in desirable geographies and generate stable free cash flow.

  • Expands Superior’s Energy Distribution footprint and scale in the U.S. and solidifies Superior as a leading retail propane distributor in North America.

  • Leverages Superior’s existing expertise, integrated platform and operational effectiveness into a new, large and complementary customer base.

  • Platform for expansion opportunities in the U.S. with a contiguous presence throughout the Eastern U.S. providing enhanced synergy opportunities on future acquisitions in a highly fragmented industry.

Financially Attractive

  • High-quality, stable cash flow and earnings profile from a business with loyal customers and consistent gross margin profile.

  • Strong cash flow accretion with the Transaction expected to be immediately accretive to adjusted operating cash flow (“AOCF”)1 before the realization of synergies and to produce double-digit AOCF accretion when annualized run-rate synergies are included2.

  • Expected to generate significant run-rate synergies estimated at US$20-25 million (Cdn$26-32 million) within 24 months after closing, primarily from cost savings and operational efficiencies.

  • Rapid deleveraging profile with anticipated total leverage of 3.7x Adjusted EBITDA3 (including annualized run-rate synergies) at Transaction close projected to decrease to 3.0x by the end of 2020.

NGL Propane sells propane and distillates to over 316,000 residential, commercial and industrial customers. NGL Propane, with over 1,000 employees in 151 locations (including 61 satellite distribution locations) and a fleet in excess of 1,000 trucks, services 22 states in the Northeast U.S., Southeast U.S. and Upper Midwest U.S. NGL Propane, trades under prominent regional brands, including Osterman Propane, Downeast Energy, Eastern Propane, Atlantic Propane, Anthem Propane, Gas Inc. and Brantley Gas.

During the twelve months ended March 31, 2018, NGL Propane sold approximately 182 million gallons of fuel generating approximately US$85 million (Cdn$111 million) in Adjusted EBITDA4. On a normalized basis, including contributions from acquisitions completed during the year Adjusted EBITDA would have been approximately US$90 million5 (Cdn$117 million). With estimated run-rate synergies of approximately US$20-25 million (Cdn$26-32 million), the Transaction is expected to be double digit accretive to AOCF on a run-rate basis6.

Closing of the Transaction, which is expected to occur in Q3 2018, is subject to customary closing conditions, including antitrust approvals in the United States. The Transaction is not subject to any due diligence or financing conditions.

Financing Summary

In conjunction with the Transaction, Superior also announced that it has entered into an agreement with a syndicate of underwriters co-led by TD Securities Inc. and CIBC Capital Markets to issue, on a bought deal basis, approximately Cdn$400 million of subscription receipts (the “Subscription Receipts”) to finance a portion of the purchase price in respect of the Transaction (the “Offering”) with the remainder being financed with a combination of a draw on Superior's revolver and a senior secured bridge credit facility.

Subscription Receipt Offering

In order to finance a portion of the purchase price in respect of the Transaction, Superior has entered into an agreement with a syndicate of underwriters (the “Underwriters”) co-led by TD Securities Inc. and CIBC Capital Markets to sell 32,000,000 Subscription Receipts on a bought deal basis. The Subscription Receipts will be offered at a price of Cdn$12.50 per Subscription Receipt (the “Offering Price”), for aggregate gross proceeds to Superior of Cdn$400 million. Superior has also granted the Underwriters an over-allotment option to purchase up to an additional 4,800,000 Subscription Receipts (or, in certain circumstances, common shares), on the same terms and conditions as the Offering, exercisable no later than 30 days after the closing of the Offering.

Superior also entered into a Cdn$400 million senior unsecured bridge facility to backstop the Offering which Superior intends to cancel upon closing of the Offering.

Each Subscription Receipt represents the right of the holder to receive, upon closing of the Transaction, without payment of additional consideration, one common share of Superior plus an amount per common share equal to the amount per common share of Superior of any dividends for which record dates have occurred during the period from the closing date of the Offering to the date immediately preceding the closing date of the Transaction, less withholding taxes, if any.

On or before June 1, 2018, Superior will file with the securities commissions or other similar regulatory authorities in each of the provinces and territories of Canada, a prospectus supplement to Superior’s short form base shelf prospectus relating to the issuance of the Subscription Receipts. Closing of the Offering is expected to occur on or about June 8, 2018, subject to TSX and other necessary regulatory approvals. The net proceeds from the Offering will be used to finance, in part, the Transaction once the proceeds are released from escrow.

This press release is not an offer of the securities for sale in the United States. The securities may not be offered or sold in the United States absent registration or an available exemption from the registration requirements of the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) and applicable U.S. state securities laws. Superior will not make any public offering of the securities in the United States. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Debt Financing

In order to finance the remainder of the Transaction, Superior’s wholly owned subsidiaries, Superior Plus US Financing Inc. and Superior Plus LP (“Superior LP” and, together with Superior Plus US Financing Inc., the “Borrowers”), have entered into a commitment letter with The Toronto-Dominion Bank and Canadian Imperial Bank of Commerce, pursuant to which such lenders have committed, subject to customary conditions, to provide a US$400 million 12-month senior secured bridge credit facility. For the remainder, Superior intends to draw on its current revolving credit facilities. Superior is also considering implementing longer term debt financing alternatives.

Advisors and Counsel

TD Securities Inc. and CIBC Capital Markets are acting as financial advisors to Superior. Orrick, Herrington & Sutcliffe LLP and Torys LLP are acting as legal counsel to Superior.

Conference Call and Webcast Information

Superior will host a conference call on May 30, 2018 at 4:45 p.m. Eastern Time, or 2:45 p.m. Mountain Time, for members of the investment community to discuss the Transaction. The dial-in for the conference call is 1-(855) 859-2056, Conference ID: 7298346. A link for the webcast will be made available on Superior’s website at prior to the conference call.

An audio recording of the conference call will be made available shortly after the call on Superior’s website at

2018 Investor Day

Superior’s Investor Day will be postponed from Friday, June 1, 2018 to Friday, June 15, 2018 at the One King West Hotel in Toronto, Ontario. For parties interested in attending the event, please email to request an invitation.  

About the Corporation

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.

Forward-Looking Statements

Certain information included in this press 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 press release includes: completion and timing of the proposed Transaction and Offering, cancellation of the backstop facility, anticipated AOCF and future growth rates; expected accretion in respect of AOCF; forecasted operating expenses; estimated synergies and financial benefits to be derived in respect of such synergies; financial and acquisition metrics; expected increases to EBITDA and the impact on total debt to EBITDA; expected increases to propane volumes; growth opportunities in respect of Superior’s Energy Distribution business; and future growth initiatives. 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 information obtained from third party industry analysts and other third party sources, and the historic performance of Superior’s businesses and those of NGL Propane. Such assumptions include anticipated financial performance, current business and economic trends, the amount of future dividends paid by Superior, business prospects, availability and utilization of tax basis, regulatory developments, currency, exchange and interest rates, trading data, cost estimates, Superior’s ability to obtain financing on acceptable terms and the timing of receipt of necessary regulatory approvals and satisfaction of the other conditions to closing of the Transaction, and are subject to the risks and uncertainties set forth below. Readers are cautioned that the preceding list of assumptions is not exhaustive.

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 risks relating to satisfaction of the conditions to, and completion of, the Transaction as well as incorrect assessments of value when making acquisitions, increases in debt service charges, the loss of key personnel, fluctuations in foreign currency and exchange rates, inadequate insurance coverage, liability for cash taxes, counterparty risk, compliance with environmental laws and regulations, reduced customer demand, operational risks involving Superior’s facilities, force majeure, labour relations matters, Superior’s ability to access external sources of debt and equity capital, and the risks identified under the heading “Risk Factors” in Superior’s current annual information form and management’s discussion and analysis. The preceding list of assumptions, 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 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 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 and 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 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 Non-GAAP Financial Measures

Fiscal 2018 Adjusted EBITDA

Adjusted EBITDA of NGL Propane is defined as fiscal 2018 net income attributable to the Company 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 redeemable non-controlling interest.

Normalized EBITDA

Normalized EBITDA represents Fiscal 2018 Adjusted EBITDA of NGL Propane adjusted for the proforma impact of acquisitions completed in the twelve months ending 2018.

Please see the “Non-GAAP Financial Measures” section in the investor presentation posted on Superior’s website at which provides a reconciliation of NGL Propane’s Adjusted EBITDA to its nearest US GAAP measure.

1 See Non-GAAP Financial Measures.
2 Including run-rate synergies of US$20 million (Cdn $26 million)
3 Represents 3.7x Adjusted EBITDA defined by Superior. See Non-GAAP Financial Measures.
4 Fiscal 2018 Adjusted EBITDA as defined by NGL. See Non-GAAP Financial Measures.
5 Fiscal 2018 Adjusted EBITDA as defined by NGL adjusted for proforma acquisitions completed in 2018. See Non-GAAP Financial Measures.
6 Including run-rate synergies of US$20 million(Cdn $26 million)

For further information about Superior, please visit our website at: 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
Toll Free: 1-866-490-PLUS (7587)