Superior will acquire all the outstanding common shares of Certarus at a price of $12.15 per share, which indicates a total of $853m and will assume Certarus’ senior bank credit and leases worth $196m
Superior Plus to acquire Certarus. (Credit: LEEROY Agency from Pixabay)
Superior Plus, a retail distributor of propane in the US, has signed a definitive arrangement agreement to acquire Canada-based green energy supplier Certarus for a total of $1.05bn.
Under the terms of the acquisition, Superior will acquire all the outstanding common shares of Certarus, worth $853m and assume its senior bank credit and leases worth $196m.
Certarus shareholders are expected to receive $353m in cash and Superior common shares at a price of $10.25 per share, which represents around 17% stake.
Board of Directors of both the companies have unanimously approved the transaction.
It is expected to close in the first quarter of 2023, subject to customary closing conditions.
Superior president and CEO Luc Desjardins said: “The acquisition of Certarus is a highly strategic and transformative transaction for Superior as it represents an exciting opportunity for significant organic growth and provides our existing and new customers with the ability to meet their ESG goals through our low carbon energy distribution platform.
“With our execution on the Superior Way Forward strategic initiatives in the past 24 months, we are ahead of our timing to achieve $700m to $750m in EBITDA from operations3 as we now expect to reach the lower end of the target by 2024.”
Certarus is a rapidly growing North American distributor of over-the-road low carbon fuels, including CNG, RNG and hydrogen.
The company leverages mobile storage units (MSUs), which are interchangeable between CNG, RNG and hydrogen to deliver low-cost and low-carbon intensity energy alternatives.
It generates revenue from fees for its lower cost and lower CI fuels, directly passing on changes in the commodity cost of its fuels to customers.
Through the acquisition of Certarus, Superior Plus is enabled to enhance its energy transition, with significant immediate and long-term value creation and financial benefits.
It intends to finance the acquisition and associated expenses using a combination of issuing its common shares worth $500m, and from its expanded senior credit facilities.
Certarus president and CEO Curtis Philippon said: “We are excited to be joining the Superior team. Certarus will benefit from Superior’s scale, portable fuel distribution expertise, and a shared commitment to safety.
“The joining of our businesses creates a strong platform upon which we can continue to grow and provide decarbonization solutions, including RNG and hydrogen.”