HollyFrontier to acquire Suncor Energy's Petro-Canada lubricants business
HollyFrontier Corp. (HollyFrontier) has entered into a definitive agreement to acquire Suncor Energy's Petro-Canada Lubricants business for approximately $845 MM, including working capital with an estimated value of $257 MM. HollyFrontier expects to fund the transaction with a combination of debt and cash on hand, and anticipates the acquisition will be immediately accretive to the Company's earnings per share and cash flow.
The Petro-Canada Lubricants plant, located in Mississauga, Ontario is the largest producer of base oils in Canada with 15 Mbpd of lubricant production capacity, and is the only North American producer of high margin Group III base oils. The facility is downstream integrated from base oils to finished lubricants and produces a broad spectrum of specialty lubricants and white oils which are distributed to end customers worldwide. The Petro-Canada Lubricants business will bring HollyFrontier industry leading product innovation and R&D capabilities, a global sales and distribution network and strong brand portfolio recognized globally. With this transaction, HollyFrontier also acquires a perpetual exclusive license to use the Petro-Canada trademark in association with Lubricants.
With the addition of the Petro-Canada Lubricants business, HollyFrontier will become the fourth largest lubricants producer in North America with a capacity of 28 Mbpd, or approximately 10% of North American production. Petro-Canada Lubricants has generated approximately $150 MM of EBITDA over the 12 month period ended June, 2016.
The transaction is subject to regulatory approval and customary closing conditions and is expected to close in 1Q of 2017.
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