Superior Plus Corp. Considers Divesting Chemicals Business

(June 17, 2019) — Superior Plus Corp. (Toronto) said June 10 it is considering the sale of its specialty chemicals business, which operates under the trade name ERCO Worldwide. Superior Plus added that given the significant growth opportunities in its U.S. energy distribution business, and the potential benefits of it becoming a pure play energy business focused on retail propane distribution, it had retained Barclays Capital Canada Inc. to assist with a potential sale of the specialty chemicals segment.

Outlined was that the company regularly reviews its portfolio to assess the strategic fit of businesses within the direction of the enterprise overall. In the event the specialty chemicals business is sold, Superior will evaluate the best use of the net proceeds, but expects them to be used primarily to reduce debt and to invest in U.S. propane acquisitions. However, proceeds could also be used to purchase Superior common shares. Assuming completion of a sale, the company expects the remaining energy distribution business will support the existing dividend policy.

“We expect specialty chemicals will be highly marketable, attracting strong buyer interest and an attractive valuation,” said Luc Desjardins, Superior Plus Corp. president and CEO. “Upon completion of any sale, we anticipate accelerating our U.S. energy distribution growth program, where we are confident we can deliver significant value as we apply our operating model to the acquired businesses and realize significant synergies. However, specialty chemicals is a solid, sustainable business with strong cash flows and we are very comfortable continuing to own the business if the process does not result in an acceptable valuation.”

Superior Plus clarifies there can be no assurance that the sale process will result in the completion of a transaction. The company has not set a timetable for completion of the review process. Any final decisions require approval of the board of directors. Superior operates two primary businesses: energy distribution includes the distribution of propane and distillates, and supply portfolio management. Specialty chemicals includes the manufacture and sale of specialty chemicals.

(SOURCE: The Weekly Propane Newsletter, June 17, 2019)