TORONTO--(BUSINESS WIRE)--Superior Plus Corp. (“Superior”)(TSX:SPB) is pleased to announce the completion of the previously announced sale of its Specialty Chemicals business (“Specialty Chemicals”) to Birch Hill Equity Partners (“Birch Hill”) for total consideration of $725 million (the “Transaction”). Under the terms of the Transaction, Superior received $600 million in cash proceeds from Birch Hill, subject to certain adjustments, and $125 million in the form of a 6% unsecured note issued by the affiliate of Birch Hill that is acquiring Specialty Chemicals. The consideration received is subject to certain post-closing adjustments as previously disclosed.
“We are excited to announce the close of the Transaction as this represents the completion of Superior’s transformation into a pure-play energy distribution company,” said Luc Desjardins, President and CEO of Superior. “The sale of Specialty Chemicals was an important component of our strategic plan and provides us with additional capital to further accelerate our accretive growth strategy in the U.S. and Canadian propane markets. We have a robust pipeline of acquisition opportunities and we anticipate more than doubling the U.S. Propane Distribution EBITDA from operations over the next five years.”
Orrick, Herrington & Sutcliffe LLP acted as legal counsel to Superior on the Transaction. Barclays acted as financial advisor to Superior.
Amended Senior Secured Credit Facility
Superior is also pleased to announce that its wholly-owned subsidiaries, Superior Plus LP, Superior General Partner Inc. and Superior Plus US Financing Inc., have completed an extension of their $750 million senior secured revolving credit facility (the “Credit Facility”) with The Bank of Nova Scotia and TD Securities as Co-Lead Arrangers, and a syndicate of ten lenders. The Credit Facility will now mature on May 8, 2026 and has been amended to reflect the release of certain obligors from its terms as a result of the Transaction. There have been no changes to the total commitments available under the Credit Facility ($750 million), the accordion facility capacity ($300 million) or the financial covenants.
“We are pleased to have completed the extension of the Credit Facility with strong support from our lenders. Superior continues to maintain its financial flexibility and low borrowing costs to support our Energy Distribution growth strategy through acquisitions and organic growth. Our strong balance sheet, along with prudent financial policies, supports our ability to pursue accretive growth opportunities to create long-term value for our shareholders,” said Beth Summers, Executive Vice President and CFO.
Superior is committed to maintaining a resilient balance sheet with sufficient liquidity to grow the business through acquisitions and organic growth. Superior plans to use the net proceeds from the Transaction initially to reduce debt, including paying down outstanding loans under the Credit Facility. As a result of the Transaction, Superior’s available liquidity based on borrowing capacity under the Credit Facility and cash on hand is approximately $1.2 billion. Superior expects to use the available liquidity for additional debt repayment and acquisitions.
2021 Virtual Investor Day
Superior will host a virtual Investor Day on May 25, 2021 at 1 PM EDT. During the event, members of the executive leadership team will provide an update on Superior’s markets and businesses, strategic transformational initiative, the Superior Way Forward, and future financial outlook.
To confirm your attendance for the event, please RSVP by emailing rsvpinvestorday@superiorplus.com. A link to the webcast along with the agenda for the event will be emailed to all participants and will also be posted on Superior’s website in the “Events” section closer to the time of Investor Day.
About the Corporation
Superior is a leading North American distributor and marketer of propane and distillates and related products and services, servicing over 780,000 customer locations in the U.S. and Canada.
For further information about Superior, please visit our website at: www.superiorplus.com 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, E-mail: investor-relations@superiorplus.com, Toll Free: 1-866-490-PLUS (7587).
Forward Looking Information
Certain information included herein is forward-looking, within the meaning of applicable Canadian securities laws. Such information is typically identified by words such as "anticipate," "believe," "could," "estimate," "expect," "plan," "intend," "forecast," "future," "guidance," "may," "predict," "project," "should," "strategy," "target," "will" or similar expressions suggesting future outcomes. Forward-looking information in this news release includes forward looking information relating to the use of proceeds from the Transaction, the anticipation that the U.S. Propane Distribution EBITDA from operations will more than double over the next five years and the use of available liquidity for additional debt repayment and acquisitions. 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 information should not be unduly relied upon.
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 the operating and financial performance of the Energy Distribution business which are described in Superior’s annual management discussion and analysis and Superior’s current annual information form for the fiscal year ended December 31, 2020 and risks relating to the availability of and ability to execute sufficient energy distribution acquisitions on attractive terms over the next five years. Key assumptions or risk factors to the anticipated ability to execute sufficient acquisitions, and more than double U.S. Propane Distribution EBITDA from operations, in the next five years include, but are not limited to, financial market conditions, Superior’s future debt levels, Superior’s ability to generate sufficient cash flows from operations to meet its current and future obligations, access to, and terms of, future sources of funding for Superior’s capital expenditures and acquisitions, future adjustments to the consideration received from the Transaction, the integration of businesses into Superior’s operations, competitive action by other companies, availability and timing of acquisition targets, actions by governmental authorities including increases in taxes and changes in environmental and other regulations, general economic, market and business conditions, the regulatory framework that governs the operations of Superior’s business and industry capacity. 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 Measures
Throughout this release, Superior has used the following terms that are not defined by International Financial Reporting Standards (“Non-GAAP Financial Measures”), but are used by management to evaluate the performance of Superior and its business: earnings before interest, taxes, depreciation and amortization (“EBITDA”) and EBITDA from operations. These measures may also provide additional useful information to and be used by investors, financial institutions and credit rating agencies to assess Superior’s performance and ability to service debt. Non-GAAP Financial Measures do not have standardized meanings prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other companies as they may calculate them differently from Superior. Securities regulations require that Non-GAAP Financial Measures are clearly defined, qualified and reconciled to their most comparable GAAP financial measures.
Non-GAAP Financial Measures should not, therefore, be considered in isolation or used in substitute for measures of performance prepared in accordance with GAAP. Investors should be cautioned that EBITDA from operations should not be construed as an alternative to net earnings, cash flow from operating activities or other measures of financial results determined in accordance with GAAP as an indicator of Superior’s performance. Non-GAAP Financial Measures are identified and defined as follows:
EBITDA from operations
EBITDA from operations represents earnings before interest, taxes, depreciation, amortization, gains and losses on disposal of assets, finance expense, restructuring costs, transaction and other costs, unrealized gains and losses on derivative financial instruments, realized gains and losses on foreign currency hedging contracts, and corporate costs. EBITDA from operations excludes costs that are not considered representative of Superior’s underlying core operating performance. Management uses EBITDA from operations to set targets for Superior (including annual guidance and variable compensation targets).
