Finning to Acquire 4Refuel, Leading Mobile Onsite Fueling Service
Finning International Inc. has reached an agreement to acquire 100 percent of 4Refuel Canada and 4Refuel U.S. for approximately $260 million. In 2018, 4Refuel is expected to generate net revenue of about $110 million and EBITDA of $33.5 million. Greater than 95 percent of 4Refuel’s profitability is generated in Canada. The purchase price equates to 7.8 x 2018 estimated EBITDA, excluding synergies.
Finning said 4Refuel is the pioneer of mobile onsite refueling and has built a strong market presence across Canada, employing about 600 people and serving more than 3,400 customers. 4Refuel is the leading mobile on-site refueling company in Canada, supporting customers in the construction, transportation, oil and gas, power generation and other industrial sectors.
As a fuel management business, service is at the core of 4Refuel’s expertise. The company refuels customer equipment directly on site, mostly during off hours when equipment is idle. This ensures physical availability of customers’ equipment, while maximizing productivity of their operations. Customers benefit from 4Refuel’s Fuel Management Online System, which allows customers to optimize on-site refueling to save time and money. 4Refuel’s approach combined with Finning’s connected asset network will generate new insights into how to better support customer needs.
“This transaction is a great example of a Caterpillar complementary bolt-on acquisition that accelerates our customer-centric growth strategy,” said Scott Thompson, president and CEO of Finning. “With this investment we will provide new and existing customers with additional services to improve productivity and decrease their total cost of equipment ownership.” Meaningful synergies are expected to be generated through the acquisition. Approximately 50 percent of 4Refuel’s customers are based in western Canada.
By combining forces, Finning will have the opportunity to sell equipment, product support, rental and more value-added services to a customer base that is currently not taking advantage of Finning’s full suite of services. Furthermore, 4Refuel will have the opportunity to sell more fuel services to Finning’s 18,000 plus customers enabled, in large part, by connectivity. Finally, the overlapping geographies and supply chains present opportunities to gain efficiencies, optimize routes and improve customer service.
The transaction will be funded with cash on hand and from existing credit facilities, and will be immediately accretive to earnings per share and free cash flow in 2019 before synergies, Finning said.
The transaction is subject to customary regulatory approvals and is expected to close early in 2019.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.