Superior Plus Announces Sale of $125 Million Promissory Note
TORONTO–(BUSINESS WIRE)–Superior Plus Corp. (“Superior”) (TSX:SPB) today announced that it has entered into an agreement to sell the $125 million unsecured promissory note received as part of the purchase price from the sale of the Specialty Chemicals business in 2021 (the “Note”) to ERCO Worldwide LP (an affiliate of Birch Hill Equity Partners), the purchaser of the Speciality Chemicals business, for proceeds of $128 million.
The Note matures on October 9, 2026 and bears interest at a rate of 6% compounded annually, which interest accrues and is paid on maturity. As of September 30, 2022, the Note had accrued interest of $10.9 million. The Note also has an earn-out adjustment feature based on the business results of the Specialty Chemicals business for the three years following closing of the transaction. As part of the sale of the Note, the parties have agreed that there will not be any adjustments made to the purchase price for the Specialty Chemicals business.
Superior expects to use the proceeds from the sale of the Note to repay indebtedness under Superior’s revolving credit facility (the “Revolver”). Pro forma the sale of the Note, Superior’s Total Net Debt to Adjusted EBITDA Leverage Ratio is expected to be 4.1x based on Superior’s Total Net Debt to Adjusted EBITDA Leverage Ratio at September 30, 2022.
Beth Summers, Executive Vice-President and Chief Financial Officer, stated, “The sale of the Note provides us with more liquidity and accelerates our debt repayment. We now expect to be within our targeted leverage range of 3.5x to 4.0x in 2023 after the sale of the Note.”
The sale of the Note is expected to close in the first quarter of 2023.
About the Corporation
Superior is a leading North American distributor and marketer of propane and distillates and related products and services, servicing approximately 890,000 customer locations in the U.S. and Canada.
For further information about Superior, please visit Superior’s website at: www.superiorplus.com or contact: Beth Summers, Executive Vice President and Chief Financial Officer, Tel: (416) 340-6015, or Rob Dorran, Vice President, Capital Markets, Tel: (416) 340-6003, E-mail: investor-relations@superiorplus.com, Toll-Free: 1-866-490-PLUS (7587).
Forward-Looking Information
This news release contains certain forward-looking information and statements based on Superior’s current expectations, estimates, projections and assumptions in light of its experience and perception of historical trends. In this news release, such forward-looking information and statements can be identified by terminology such as “will”, “expects”, “annualized”, and similar expressions.
In particular, this news release contains forward-looking statements and information relating to expected use of proceeds from the sale of the Note, expected Total Net Debt to Adjusted EBITDA Leverage Ratio and expectations related to the targeted leverage range of 3.5x to 4.0x in 2023. These forward-looking statements are being made by Superior based on certain assumptions that Superior has made in respect thereof as at the date of this news release regarding, among other things: the closing of the sale of the Note within expected timelines and according to agreed upon terms, the success of Superior’s operations; prevailing commodity prices, margins, volumes and exchange rates; that Superior’s future results of operations will be consistent with past performance and management expectations in relation thereto; the continued availability of capital at attractive prices to fund future capital requirements; and future operating costs . These forward-looking statements are not guarantees of future performance and are subject to several known and unknown risks and uncertainties, including, but not limited to: non-performance of agreements in accordance with their terms; the impact of competitive entities and pricing; reliance on key industry partners and agreements; actions by governmental or regulatory authorities including changes in tax laws and treatment, or increased environmental regulation; adverse general economic and market conditions in Canada, North America and elsewhere; fluctuations in operating results; labour and material shortages; and certain other risks detailed from time to time in Superior’s public disclosure documents including, among other things, those detailed under the heading “Risk Factors” in Superior’s management’s discussion and analysis and annual information form for the year ended December 31, 2021, which can be found at www.sedar.com.
Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted, forecasted or projected. Such forward-looking statements are expressly qualified by the above statements. Superior does not undertake any obligation to publicly update or revise any forward looking statements or information contained herein, except as required by applicable laws.
Contacts
Superior Plus Corp. 401-200 Wellington Street West Tel: 416-345-8050 Toll Free: 866-490-PLUS
Toronto, Ontario M5V 3C7 Fax: 416-340-6030 Web: www.superiorplus.com
