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Parkland USA Sees Long Runway for Growth Due to C-store Industry Consolidation

Parkland USA Sees Long Runway for Growth Due to C-store Industry Consolidation
Written by publishing team

CALGARY, Alberta – Parkland Corp. started with a single store in Red Deer, Alberta, Canada, and today is an international company with more than 3,300 retail locations in 25 countries, including the United States.

Years ago, the company didn’t have a mergers and acquisitions (M&A) team and waited for bankers to take on Parkland with an offer. The problem with this model was that the company was overpaying and not creating synergies, so Parkland built its own M&A team.

“We are a consolidated company. We have been very successful in enhancing the convenient and fuel marketing space”, President and CEO Bob Espy explained during the company’s recent investor day. “We are not a complete comfort company. We are not a pure fuel company. But these opportunities allow us to buy and cultivate good assets at a good value.

“As we look forward, one of the things we have learned is to have a broad pipeline. This is an industry that is being consolidated. There are a lot of companies for sale, so we are looking at a lot of opportunities, so we don’t owe any one opportunity.”

Parkland’s comprehensive growth plan includes:

  • Develop – Promoting and growing the traditional marketing business in flexible markets;
  • diversification – Create convenient destinations through owned brands, dining capabilities, digital communications, and electric vehicle charging; And
  • Carbon removal – Helping their commercial customers remove carbon.

In the United States, the company’s subsidiary Parkland USA sees significant industry consolidation on the horizon. The subsidiary operates in 11 US states — Idaho, Montana, South Dakota, Minnesota, Wyoming, Utah, Colorado, Arizona, New Mexico and Florida — and has enough opportunities within these existing markets to double the number of its stores going forward without having to enter new markets, according to Doug. He, the president of Parkland USA.

Parkland USA recently entered into an agreement to acquire all assets of Lynch Oil and its subsidiaries. Lynch Oil’s operations are concentrated in southern and central Idaho, and include five high-volume stores, front yards, two travel centers, two independent car washes and a railroad storage terminal. This acquisition also It will add annual fuel sales of over 180 million liters.

“What drives the difference in the ratings is that if you’re in the retail merging business and you want to add a domain and you already have thousands of stores, you won’t find many chains that also have thousands of stores. Instead, we’ll take advantage of stores like Lynch Oil through five Big-box stores and two travel hubs,” Hu explained.

The Lynch Oil deal will enhance Parkland’s growth platform across the Pacific Northwest, and complement its existing retail, commercial and wholesale business in Idaho.

The operator has established a fourth US Regional Operating Center (ROC) in Idaho Falls, Idaho, through its acquisition of Conrad & Bischoff Inc. (C&B) earlier in 2021. C&B’s operations are concentrated in the fast-growing markets of Idaho and western Wyoming, with additional distribution capacity in Utah, Nevada, Montana, and other states.

According to Hu, the largest addressable market for Parkland USA is Florida. The Sunshine State has 9,800 C stores, with 7,800 of these locations selling gas. The water related market fits the retailer criteria of a fast growing market characterized by rapid population growth, governance, supply dynamics and a scalable market.

Parkland USA is positioned to expand its reach in Florida with the acquisition of Urbieta Oil Co., which includes the acquisition of 94 locations, 54 of which are “strategic locations.” These sites are located in two counties close to each other.

As Parkland USA looks to launch its flagship Canadian brand, On the Run, in the United States, this The transaction will give the company multiple advantages. As Hu explained, they include:

  • The basic scale and intensity it takes to launch On the Run successfully;
  • good returns on advertising and marketing; And
  • Loyalty in a dense market where the company can successfully spread in one place and build from there, with good values ​​and tremendous infrastructure.

Parkland Corp., headquartered in Calgary, is an independent supplier and marketer of fuels and petroleum products, and operator of convenience stores. Parkland currently serves customers throughout Canada, the United States, the Caribbean and the Americas through three channels: retail, commercial and wholesale.


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