Parkland Advances Growth Strategy With Two International Transactions

News Americas, CALGARY, Alberta, May 17, 2021: Parkland Corporation (“Parkland”, “we”, “our”, or “the Company”) (TSX:PKI) is pleased to announce, through its 75 percent ownership in Sol Investments SEZC (“Sol”), two transactions in our International business (the “International transactions”) which provide additional scale in the Caribbean and strengthen our position as a natural acquirer in the region.

“These transactions strengthen Parkland’s network throughout the Caribbean and extend our portfolio of growth opportunities in retail, commercial, LPG and aviation,” said Pierre Magnan, President of Parkland International. “Our International business currently spans 23 countries and provides a platform for continued organic growth and consolidation in the region. We are excited about the opportunity set in the International segment which we expect to play a significant role in achieving Parkland’s 2025 growth ambition.”

Details of the International transactions are as follows:

Creating the Dominican Republic’s largest retail network

Through the contribution of our approximately 80 retail locations, commercial and aviation marketing operations in the Dominican Republic (“DR”) and a follow-on investment, Sol will become a 50 percent indirect partner in Isla Dominicana de Petroleo Corp. (“Isla”). Isla currently operates a high-quality retail network with approximately 160 locations. The combined portfolio will comprise 240 retail locations (the largest retail network in the DR) alongside an integrated commercial and aviation business. As part of the agreement, Isla will operate the joint onshore marketing operations while Parkland will become the principal fuel supplier to the combined network.

Strategic rationale includes:

A market leading retail network in all major DR population centers with operational synergies

Strong free cash flow conversion with regulated on-shore margins in a high-growth market

Unlocks supply synergies through improved scale and optimized shipping logistics

A new partnership with a shared appetite for continued growth and renewable opportunities

Becoming the leading fuel marketer in St. Maarten

We have signed an agreement for the purchase of an integrated fuel marketing business with operations in St. Maarten. The acquisition includes retail, commercial, marine, LPG distribution and an aviation business. The acquisition strengthens our activities at the Princess Juliana International Airport (a hub for surrounding islands and major North American and European markets) and adds a complementary retail network.

As a result of the acquisition, we will become the leading fuel marketer in the Dutch side of St. Maarten and are well positioned to drive operational synergies.

Together with the Puerto Rico aviation acquisition disclosed with our first quarter 2021 results, the International transactions are expected to increase our International segment’s annual run-rate Adjusted EBITDA including non-controlling interest by approximately C$20 million (C$15 million attributable to Parkland), prior to additional growth and synergy upside.

The International transactions will be funded out of existing credit facility capacity. Subject to customary closing conditions, the transactions are expected to close in the third quarter of 2021.

Forward-Looking Statements

Certain statements contained in this news release constitute forward-looking information and statements (collectively, “forward-looking statements”). When used in this news release the words “expect”, “will”, “could”, “would”, “believe”, “continue”, “pursue” and similar expressions are intended to identify forward-looking statements. In particular, this news release contains forward-looking statements with respect to, among other things: the successful completion of the transactions and timings thereof; expected benefits of the transactions, collectively and independently, as applicable, including without limitation, expected increase to the International segment’s run rate Adjusted EBITDA resulting from the International transactions, strengthening Parkland’s position as a natural acquirer in the region and its network in the Caribbean, extending Parkland’s growth opportunities, the projected growth and synergy upside, organic growth and consolidation opportunities, post-closing synergy opportunities, renewable opportunities, the creation of the largest retail network in DR and the size thereof and becoming the leading fuel marketer in St. Maarten; the International segment’s expected contribution to Parkland’s 2025 growth ambition; and the anticipated funding of the transactions.

These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These forward-looking statements speak only as of the date of this news release. Parkland does not undertake any obligations to publicly update or revise any forward-looking statements except as may be required by securities law. Actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous risks and uncertainties including, but not limited to, failure to complete these transactions; failure to satisfy the conditions to closing of the transactions; failure to realize all or any of the anticipated benefits of the transactions; general economic, market and business conditions; competitive action by other companies; refining and marketing margins; the ability of suppliers to meet commitments; actions by governmental authorities and other regulators including but not limited to increases in taxes or restricted access to markets; changes and developments in environmental and other regulations; and other factors, many of which are beyond the control of Parkland. See also the risks and uncertainties described in “Forward-Looking Information” and “Risk Factors” included in Parkland’s Annual Information Form dated March 5, 2021 and in “Forward-Looking Information” and “Risk Factors” in Parkland’s annual MD&A for the year ended December 31, 2020 dated March 4, 2021 and in the interim MD&A for the three month period ended March 31, 2021 dated May 3, 2021, each as filed on SEDAR and available on the Parkland website at www.parkland.ca.

Expected increase in our International segment’s annual run-rate Adjusted EBITDA is based on anticipated full-year impact of the combined Puerto Rico aviation acquisition (disclosed May 3, 2021) and the International transactions; future performance of such businesses may differ from expectations due to the numerous risks and uncertainties as noted above. Due to closing date impacts of the transactions and other factors, this does not represent the expected 2021 Adjusted EBITDA impact for the International segment.

Non-GAAP Financial Measures

Adjusted EBITDA is a measure of segment profit. See Section 9 and Section 14 of the Q1 2021 MD&A and Note 13 of the Q1 2021 FS for a reconciliation of these measures of segment profit. Investors are encouraged to evaluate each measure and the reasons Parkland considers it appropriate for supplemental analysis.

Investors are cautioned that these measures should not be construed as an alternative to net earnings determined in accordance with IFRS as an indication of Parkland’s performance.

About Parkland
Parkland is an independent supplier and marketer of fuel and petroleum products and a leading convenience store operator. Parkland services customers across Canada, the United States, the Caribbean region and the Americas through three channels: Retail, Commercial and Wholesale. Parkland optimizes its fuel supply across these three channels by operating and leveraging a growing portfolio of supply relationships and storage infrastructure. Parkland provides trusted and locally relevant fuel brands and convenience store offerings in the communities it serves.

Parkland creates value for shareholders by focusing on its proven strategy of growing organically, realizing a supply advantage and acquiring prudently and integrating successfully. At the core of our strategy are our people, as well as our values of safety, integrity, community, and respect, which are embraced across our organization.