Superior Plus Announces US$260 Million Strategic Investment by Brookfield Asset Management

Superior Plus Corp. (Toronto) announced June 8 that Brookfield Asset Management Inc., through its Special Investments program, agreed to make a $260 million (U.S.), or approximately $350 million (C), equity investment in Superior through the purchase of newly created perpetual exchangeable Series 1 Preferred Stock of a U.S. subsidiary of Superior on a private placement basis.

The Brookfield investment is expected to provide several immediate benefits to Superior, while optimally positioning Superior for future growth.
  • It offers increased ability to pursue accretive acquisitions in the consolidating U.S. propane market by enhancing Superior’s ability to actively pursue high-return acquisitions at valuations that have become more attractive in the current market environment.
  • It provides an immediate reduction in leverage by significantly strengthening Superior’s balance sheet with an immediate reduction in the Total Debt to Adjusted EBITDA Leverage Ratio to approximately 3.2x based on the trailing 12 months Adjusted EBITDA as of April 30, 2020. This places Superior in its long term targeted leverage range of 3.0x to 3.5x.
  • It establishes a long-term strategic shareholder. With the addition of a highly respected strategic partner in Brookfield, with significant financial strength and tremendous transaction expertise across its global investment team, Superior is positioned to pursue a greater number and scale of acquisition opportunities.

“Acquisitions are becoming increasingly attractive as fewer competing buyers are pursuing growth at the current time,” said Luc Desjardins, president and CEO of Superior. “We are excited to partner with Brookfield on the execution of our strategy. Our differentiated business platform, combined with the improved financial strength and enhanced liquidity resulting from the Brookfield Investment, positions Superior to become the leading consolidator in the U.S. propane industry, which we view as a highly opportunistic environment.”

“We are pleased to partner with Superior as they continue to execute on their proven strategy of accretive tuck-ins and larger-scale acquisitions,” said David Levenson, managing partner, Brookfield. “We believe Superior is well-positioned to benefit from the ongoing consolidation of the North American propane market and look forward to supporting the business as it pursues growth opportunities.”

The closing date is expected to occur by the end of July 2020, subject to receipt of Toronto Stock Exchange approval and other necessary regulatory approvals.
With the Brookfield investment, Superior now anticipates being within its long-term Total Debt to Adjusted EBITDA targeted leverage range of 3.0x to 3.5x at December 31, 2020.

SOURCE: The Weekly Propane Newsletter, June 18, 2020. Weekly Propane Newsletter subscribers receive all the latest posted and spot prices from major terminals and refineries around the U.S. delivered to inboxes every week. Receive a center spread of posted prices with hundreds of postings updated each week, along with market analysis, insightful commentary, and much more not found elsewhere.