Will Expand Commercial and Industrial
Distribution Platform in the Land Segment
World Fuel Services Corporation (NYSE: INT), today announced
that a wholly-owned subsidiary of the company has signed definitive
agreements to acquire two U.S. land fuel distributors: PAPCO, Inc.
(“PAPCO”), which services retail, commercial and industrial
customers with fuel, price-risk management products, and fleet card
solutions throughout the Mid-Atlantic region of the United States
and Associated Petroleum Products, Inc. (“APP”), which provides
fuel and related services to agricultural, automotive,
construction, and commercial and industrial customers in the
Pacific Northwest. The aggregate purchase price for both companies
will be approximately $230 million and will be funded through the
company’s existing credit facilities.
PAPCO is headquartered in Virginia Beach, VA, with 150 employees
and 2015 revenue of $1 billion and APP is headquartered in Tacoma,
WA, with 275 employees and 2015 revenue of $600 million. Both are
leading distributors of gasoline, diesel, lubricants, propane and
related services in their respective regions.
“The acquisitions of PAPCO and APP significantly expand our
geographic reach and supply and distribution capabilities, while
further strengthening our commercial and industrial distribution
platform in the United States,” stated Michael J. Kasbar, chairman
and chief executive officer of World Fuel Services Corporation. “We
look forward to welcoming the PAPCO and APP teams to the World Fuel
Services organization.”
“We are pleased to have these two industry-leading companies,
established management teams and enthusiastic employees, join World
Fuel. This transaction expands our extensive supply relationships
and product offerings as we continue to grow our diversified
business,” said Michael Crosby, executive vice president, global
land for World Fuel Services Corporation.
Excluding the impact of one-time acquisition related expenses
and amortization of acquired intangible assets of approximately $4
million and $9 million respectively, the transactions are expected
to be $0.22 to $0.26 accretive to earnings on a Non-GAAP basis in
the first twelve months.
The transactions are subject to customary closing conditions and
are expected to be completed within the next 45 days.
Non-GAAP Financial Measures
This press release includes selected financial information that
has not been prepared in accordance with accounting principles
generally accepted in the United States (“GAAP”). Specifically, we
have used non-GAAP accretion to earnings per share, which excludes
one-time acquisition-related expenses and amortization of acquired
intangible assets, primarily because we do not believe they are
reflective of the company’s core operating results. We believe that
this non-GAAP financial measure, when considered in conjunction
with our financial information prepared in accordance with GAAP, is
useful to investors to further aid in evaluating the ongoing
financial performance of the Company and to provide greater
transparency as supplemental information to our GAAP results.
Non-GAAP financial measures should not be considered in isolation
from, or as a substitute for, financial information prepared in
accordance with GAAP. In addition, our presentation of non-GAAP
accretion may not be comparable to the presentation of such metric
by other companies. Investors are encouraged to review the
reconciliation of this non-GAAP measure to its most directly
comparable GAAP financial measure contained in this press
release.
Information Relating to Forward-Looking
Statements
This release includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements regarding our expectations about the effect of
the acquisitions on our land segment, our geographic reach and
distribution capabilities, the expansion of supply relationships
and product offerings and the effect of the transaction on our
earnings, as well as our expectations about the timing for closing
and funding of the purchase price. These forward-looking statements
are qualified in their entirety by cautionary statements and risk
factor disclosures contained in the company’s Securities and
Exchange Commission (“SEC”) filings, including the company’s Annual
Report on Form 10-K filed with the SEC on February 16, 2016. Actual
results may differ materially from any forward-looking statements
due to risks and uncertainties, including, but not limited to: our
ability to obtain required consents and satisfy closing conditions,
our ability to effectively integrate and derive benefits from the
acquisitions, our ability to capitalize on new market
opportunities, potential liabilities, limited indemnities and the
extent of any insurance coverage, the outcome of pending litigation
and other proceedings, the impact of quarterly fluctuations in
results, the creditworthiness of our customers and counterparties
and our ability to collect accounts receivable, environmental and
other risks associated with the storage, transportation and
delivery of petroleum products, our failure to effectively hedge
certain financial risks associated with the use of derivatives,
non-performance by counterparties or customers on derivatives
contracts, loss of, or reduced sales, to a significant government
customer, uninsured losses, the failure of fuel and other products
we sell to meet specifications, fluctuations in world oil prices or
foreign currency, changes in political, economic, regulatory, or
environmental conditions, adverse conditions in the markets or
industries in which we or our customers and suppliers operate, the
impact of natural disasters, adverse results in legal disputes,
unanticipated tax liabilities, our ability to retain and attract
senior management and other key employees and other risks detailed
from time to time in the company’s SEC filings. New risks emerge
from time to time and it is not possible for management to predict
all such risk factors or to assess the impact of such risks on our
business. Accordingly, we undertake no obligation to publicly
update or revise any forward-looking statements, whether as a
result of new information, changes in expectations, future events,
or otherwise.
About World Fuel Services
Corporation
Headquartered in Miami, Florida, World Fuel Services is a global
fuel logistics, transaction management and payment processing
company, principally engaged in the distribution of fuel and
related products and services in the aviation, marine and land
transportation industries. World Fuel Services sells fuel and
delivers services to its clients at more than 8,000 locations in
more than 200 countries and territories worldwide.
The company's global team of market makers provides deep domain
expertise in all aspects of aviation, marine and land fuel
management. Aviation customers include commercial airlines, cargo
carriers, private aircraft and fixed base operators (FBOs), as well
as the United States and foreign governments. World Fuel Services'
marine customers include international container and tanker fleets,
cruise lines and time-charter operators, as well as the United
States and foreign governments. Land customers include petroleum
distributors, retail petroleum operators, and industrial,
commercial, residential and government accounts. The company also
offers transaction management services which consist of card
payment solutions and merchant processing services to customers in
the aviation, marine and land transportation industries. For more
information, call 305-428-8000 or visit www.wfscorp.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20160623005299/en/
World Fuel Services CorporationIra M. Birns,
305-428-8000Executive Vice President & Chief Financial
OfficerorGlenn Klevitz, 305-428-8000Vice President, Assistant
Treasurer
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