Superior Plus Announces $240M Acquisition of Kamps Propane

TORONTO — Superior Plus Corp. has announced that one of its wholly-owned subsidiaries has entered into an agreement to acquire the equity interests of Kamps Propane Inc., High Country Propane Inc., Pick Up Propane Inc., Kiva Energy Inc., Competitive Capital Inc. and Propane Construction and Meter Services (collectively, “Kamps”) for an aggregate purchase price of approximately US $240 million (CDN $299 million) before adjustments for working capital. Superior anticipates drawing on its credit facility to fund the amount of the purchase price due on closing.

The acquisition, which is subject to customary regulatory and commercial closing conditions, is anticipated to close during the third quarter of 2021.

Acquisition Highlights

• Aligned with Superior’s core strategy of investing in established businesses that are in desirable geographies and generate stable free cash flow.
• Significantly expands Superior’s United States propane distribution footprint and scale in California.
• Establishes a large operating platform in an attractive propane market, which is expected to increase opportunities for synergy realization with future acquisitions in California.
• Leverages Superior’s existing expertise, integrated platform and operations into a new customer base.
• Stable cash flow and earnings profile from a business with loyal customers and consistent gross margin profile.
• Kamps’ culture is aligned with Superior’s values, including the promotion of safety, respect and delivering on commitments.
• Expected synergies opportunity of at least 25% of the adjusted EBITDA of Kamps.
• Expected to modestly increase Superior’s 2021 adjusted EBITDA.

Founded in 1969 by John Kamps, Kamps is an independent, family-owned-and-operated retail and wholesale propane distributor based in California servicing approximately 45,000 residential, commercial and wholesale customers. Kamps has 14 retail branch offices, 5 company-operated rail terminals, over 375 vehicles and approximately 280 employees.

During the year ended Dec. 31, 2020, Kamps earned approximately $27 million (CDN $34 million) in adjusted EBITDA. On a normalized basis, including the achievement of expected synergies and weather consistent with the five-year average, Superior expect Kamps to generate approximately $34 million (CDN $42 million) in adjusted EBITDA on a run-rate basis 24 months following the close of the acquisition. Superior anticipates updating its 2021 adjusted EBITDA guidance concurrently with the release of its Q2 2021 financial results.

“We are very pleased to enter into this transaction which expands our U.S. propane distribution business in California,” said Luc Desjardins, Superior’s president and CEO. “John Kamps has built a great business and we look forward to welcoming the Kamps employees to Superior and continuing to provide outstanding customer service to their customers. The acquisition of Kamps is our sixth acquisition in 2021 and moves us further towards the Superior Way Forward acquisition target of $1.9 billion. The acquisition of Kamps also establishes a large operating platform in the Western U.S. and California to continue making accretive acquisitions and generating synergies.”