Superior Plus Corp. Announces Agreement to Acquire Quarles Petroleum Inc.

TORONTO (March 28, 2022) — Superior Plus Corp. announced it has entered into an agreement to acquire the retail propane distribution and refined fuels assets of Quarles Petroleum Inc. for an aggregate purchase price of approximately US$145 million (CA$180 million) before adjustments for working capital.

The acquisition, which is subject to customary regulatory and commercial closing conditions, is anticipated to close in the second quarter of 2022.

Acquisition Highlights

• Aligned with Superior’s core strategy of investing in high quality businesses that are in desirable geographies and that can increase Superior’s existing stable free cash flow through the realization of synergies.
• Benefits retail propane customers by bringing Superior’s fuel distribution expertise, integrated platform and operational effectiveness to a new customer base.
• Anticipated recurring annual EBITDA including estimated synergies of approximately US$19 million ($24 million) providing an attractive acquisition valuation.
• Expected to modestly increase Superior’s 2022 Adjusted EBITDA due to the anticipated timing of the closing of the Acquisition and the seasonality of operations.
• Pro forma the Acquisition and bought deal equity offering, Superior expects to immediately be within its Total Net Debt to Adjusted EBITDA target range of 3.5x to 4.0x.

Founded in 1940, the Quarles Delivered Fuels Business is an established retail propane distributor servicing approximately 55,000 residential and commercial customers primarily in Virginia. Quarles has 29 propane bulk plants, one rail terminal, approximately 3 million gallons of storage capacity, a fleet of 197 vehicles and approximately 181 employees.

On a normalized basis, including the achievement of expected synergies and weather consistent with the five-year average, Superior expects Quarles to generate approximately US$19 million (CA$24 million) in adjusted EBITDA on an annual run-rate basis 24 months following the close of the Acquisition.

“We are very pleased to enter into this transaction which expands our ability to serve propane customers in Virginia,” said Luc Desjardins, Superior’s president and CEO. “Quarles is a high quality business and we look forward to welcoming the team to Superior and further improving the already outstanding customer service that Quarles provides to its customers. The acquisition of Quarles is representative of the acquisition opportunities we are seeing in the market today, and advances us further towards our previously announced 2026 EBITDA from operations growth objectives. This acquisition, coupled with the cold weather in January and February, is a good start to 2022 for Superior.”

Beth Summers, executive vice president and chief financial officer, said, “Superior’s ability to access capital markets with strong support from our underwriters demonstrates confidence in Superior’s existing operations and the Superior Way Forward strategy. The issuance of common equity accelerates our debt reduction plan and is expected to provide us with the funding to achieve the Superior Way Forward acquisition goal of $1.9 billion in acquisitions, at a rate of approximately $250 million in acquisitions annually, while achieving our leverage target of 3.5x to 4.0x.”