AltaGas Ltd. says it has agreed to pay $715 million in cash to privately held SAM Holdings Ltd. to double its ownership share in oil and gas liquids handling firm Petrogas Energy Corp. to 74 per cent.
Calgary-based AltaGas bought a one-third interest in Petrogas for about $440 million in 2013 as part of a transaction that allowed joint venture partner Tokyo-based Idemitsu Kosan Co., Ltd., to also acquire a one-third share.
It says Idemitsu Kosan will own about 26 per cent of Petrogas after the close of the current transaction.
AltaGas CEO Randy Crawford says Petrogas's Ferndale propane and butane export terminal in Washington state fits in well with the Ridley Island propane export terminal AltaGas opened in B.C. last year.
Crawford added that Petrogas has generated average adjusted earnings of about $186 million per year over the past three years.
Petrogas CEO Stan Owerko, who founded the private company 35 years ago, says he will step down when the deal closes, but serve as a consultant over the next 12 to 18 months.
“I have had the rare privilege of growing Petrogas into one of the largest privately held midstream and logistics companies in North America,'' Owerko said in a news release.
“It is a business that I'm proud to have assembled alongside the strong management team and experienced employees that are part of the company, including the approximately 300 employees that are part of the company today. However, it's an appropriate time to have AltaGas and Idemitsu assume full ownership.''
In addition to the export terminal, Petrogas operates storage terminals, facilities that produce drilling fluids, jet fuel, furnace fuel and heating oil, and trucking and rail divisions.
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