Dive Brief:
- Parkland Corporation’s board of directors has initiated a strategic review to find ways to help the company maximize shareholder value, the convenience retailer shared in its full-year earnings update Wednesday evening.
- Parkland is exploring numerous options with the review, including mergers, divestitures, acquisitions and even an outright sale of the company, President and CEO Bob Espey said during the company’s earnings call on Thursday. Parkland has hired financial advisors Goldman Sachs Canada and BofA Securities to assist with the review.
- Parkland’s retail and fuel businesses have struggled over the past couple of years. The company is already in the process of divesting up to $500 million worth of non-core assets and is exploring a sale of its Florida business as a means to improve its margins. It has also made hundreds of staff cuts since early 2023.
Dive Insight:
Parkland’s full-year revenue in the U.S. — where it has about 650 c-stores, 200 of which are company-operated — fell from $186 million in 2023 to $168 million in 2024, which was “below expectations,” the company said in its earnings report. As it has in the past, Parkland pinned its U.S. struggles on unfavorable market conditions causing declines in retail and commercial fuel volumes.
It appears that Parkland’s board of directors has had enough of these headwinds. The strategic review initiated this week will analyze and evaluate Parkland’s entire business — not only in the U.S. but in its home base of Canada and in the Caribbean — as its stock price has plunged since early 2024.
“We acknowledge that Parkland shares have underperformed and do not currently reflect the intrinsic value of the company,” Espey told analysts on Thursday. “Initiating a review is appropriate at this time.”
Last April, one of Parkland’s largest shareholders at the time called for a strategic review of the company amid long-term underperformance. Parkland denied the request, saying a strategic review wasn’t in the best interests of its shareholders.
Nearly a year later, Parkland’s executives and its board have changed their minds.
“The process will be robust — we're going to look at all options,” interim CFO Brad Monaco told analysts on Thursday. “We've got world-class advisors that are supporting it.”
Espey emphasized on Thursday that the review will let Parkland analyze how its long-term assets fit under the company’s entire portfolio for the next decade. While Parkland intends to work through the review as quickly as it can, “it’s hard to put a finite duration” on its timeline, he said.
