CALGARY, AB, Jan. 18, 2022 /PRNewswire/ - Parkland Corporation
("Parkland", "we", the "Company", or "our") (TSX: PKI), a leading
operator and consolidator of convenience retail and fuel marketing
businesses, announced today it has entered into an agreement to
acquire M&M Food Market ("M&M") ("the Acquisition").
M&M is a premium, restaurant-quality frozen food retailer who
brings high-quality, convenient food choices to Canadians. This
acquisition represents one of many steps we are taking in our
retail diversification strategy to expand our proprietary food
offer, customer reach and innovation pipeline.
"This acquisition provides a platform to grow our food offer,
expand our proprietary brands, and advance our digital and loyalty
strategy," said Ian White, SVP
Strategic Marketing & Innovation. "Consistent with our
commitment to create convenience destinations, M&M's national
store network, and innovative approach to food preparation and menu
development positions us to offer high-quality food that
complements our growing quick-serve restaurant offerings. We will
grow these capabilities in all our operating regions and bolster
our digital connection to customers by combining M&M and
JOURNIE™ rewards programs. We look forward to bringing ON the RUN
and M&M together to help customers make the most of every
stop."
The acquisition includes over 300 well-located standalone
franchise and corporate owned stores, over 2,000 M&M Express locations, and a
well-established rewards program with approximately two million
active members. Led by an experienced management team who have a
proven track record of growth and a food-first culture, M&M
will create quality food options that our customers can consume
fresh-from-frozen, both on site and on the go, and prepared from
frozen at home. We will leverage these capabilities throughout our
existing network and soon to be launched standalone ON the
RUN convenience locations.
"Parkland's ON the RUN brand is a convenience retail
leader and we are excited to combine our two offerings," said
Andy O'Brien, CEO of M&M.
"M&M and its franchise partners share Parkland's customer focus
and passion for quality food. The combination of our innovative
food capabilities and Parkland's more than 3,000 retail locations
in 25 countries creates an immediate runway of growth and expansion
opportunities."
This Acquisition enables key elements of our strategy:
- Advances our enterprise food strategy: Adds a
proprietary brand, experienced team, franchisee network, and a
scalable fresh and fresh-from-frozen food growth platform across
all our markets. We will leverage M&M's expertise and track
record of developing successful menus in its innovation kitchen to
evaluate and develop additional fresh and quick-serve food choices
across our network.
- Advances our digital strategy and creates a premier Canadian
loyalty program: By combining JOURNIE™ and M&M's
reward programs which has two million active members, we will
create extensive cross-promotional opportunities and form one of
Canada's premier loyalty
programs.
- Enhances our ON the RUN customer value
proposition: M&M will be integral to our growing On
the Run network, bolstering our in-store, e-commerce and
home delivery offers, and supporting our standalone convenience
concept.
- Capital-light: M&M leverages a
well-established, highly efficient food preparation and
distribution network, requiring limited capital investment to
efficiently serve its retail locations.
- Ratable cash flow with significant growth
potential: M&M's royalty fee-based operating model creates
a ratable stream of cash flow. We aim to grow M&M's Canadian
annual run rate Adjusted EBITDA to approximately $55 million in three years.
The total consideration for this transaction is approximately
$322 million, which will be funded
out of existing credit facility capacity. This Acquisition
represents a valuation metric of less than 8.5x estimated 2021
Adjusted EBITDA. Subject to approval under the Competition
Act (Canada) and other
customary closing conditions, the Acquisition is expected to close
in the first quarter of 2022.
Acquisition Conference Call and Webcast
Details
Parkland will host a webcast and conference call on
Thursday, January 18, at 4:00pm MDT (6:00pm
EDT) to discuss the acquisition. To listen to the live
webcast and watch the presentation, please use the following link:
https://produceredition.webcasts.com/starthere.jsp?ei=1524874&tp_key=388fcb2af7
Analysts and institutional investors interested in participating
in the question-and-answer session of the conference call may do so
by calling 1-888-390-0546 (toll-free) (Conference ID: 68511332).
International participants can call 1-800-389-0704 (toll)
(Conference ID: 68511332).
Please connect and log in approximately 10 minutes before the
beginning of the call. The webcast will be available for replay two
hours after the conference call ends at the link above. It will
remain available for one year and will also be posted to
www.parkland.ca.
About Parkland Corporation
Parkland's purpose is to
Power Journeys and Energize Communities. We are a leading operator
and consolidator of convenience retail and fuel marketing
businesses. Through our portfolio of trusted and locally relevant
convenience, retail, commercial and wholesale brands, we serve over
one million customers per day across Canada, the United
States, the Caribbean
region and Central and South
America. In addition to leveraging our supply and storage
capabilities to provide the essential fuels that our diverse
customers rely on, we are a leader in manufacturing low carbon
fuels and are rapidly building a charging network to serve growing
demand for convenient charging from electric vehicle drivers in
select markets.
Parkland's proven strategy is centered around growing
organically, realizing a supply advantage, acquiring prudently, and
integrating successfully. We are positioned to win through the
energy transition and are focused on developing our existing
business in resilient markets, further diversifying our retail
business into convenience, food, and EV charging, and helping our
commercial customers decarbonize their operations. Our strategy is
enabled and underpinned by our people, as well as our values of
safety, integrity, community, and respect, which are deeply
embedded across our organization.
About M&M Food Market:
Founded in 1980, M&M
Food Market is Canada's leading
retailer of frozen foods and has helped Canadians put delicious
meals on the table by offering consumers products that were
prepared with care using authentic recipes and high-quality
ingredients along with personalized customer service, all within a
uniquely convenient shopping environment. Following the beginning
of a significant rebranding effort in 2016 – including the name
change from M&M Meat Shops, a new store design, new products
and packaging, a new website, and newly trained Meal Advisors –
M&M Food Market has been focused on innovation across virtually
every aspect of the business. It is headquartered in Mississauga, Ontario, with locations in all
ten provinces, Yukon, and the
Northwest Territories. M&M has
been recognized as one of Canada's
Best Managed Companies for 11 years in a row. M&M products
include delicious and convenient options across virtually every
food category including appetizers, prepared meals, seafood, meats
and poultry, vegetables, sides, bakery, and desserts and come in
formats ranging from individual portions to family-sized
options.
Forward Looking Statement
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
Acquisition and the timing thereof; expected benefits of the
acquisition, including: potential organic growth, creating
convenience destinations; expanding Parkland's food offerings
throughout its existing network; creating a loyalty coalition
between the M&M and JOURNIE™ rewards programs; expected future
increase to the run rate Adjusted EBITDA of the M&M business
and the timing thereof; and the launch of standalone ON the
RUN convenience locations.
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 the Acquisition; failure to satisfy
the conditions to closing of the Acquisition; failure to realize
all or any of the anticipated benefits of the Acquisition; general
economic, market and business conditions; competitive action by
other companies; 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 "Forward-Looking Information"
and "Risk Factors" included in the Q3 2021 MD&A dated
November 2, 2021 and the Q4 2020
MD&A dated March 4, 2021, each
filed on SEDAR and available on the Parkland website at
www.parkland.ca.
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SOURCE Parkland Corporation