Canada's Superior Plus Corp said it agreed to buy Pennsylvania-based Sunoco Inc's retail heating oil and propane distribution business for about $82.5 million in cash, to expand its fuel distribution business in the United States.
Superior also said it would raise about C$45 million in an equity sale.
The Sunoco business being bought -- Sunoco Retail Heat -- has a distribution network with operation of two pipeline-supplied fuel terminals and 22 retail bulk plants providing up to 20 million gallons of storage capacity in its core markets of Pennsylvania and New York, Superior said.
In addition to increasing residential and commercial heating oil products and services, Sunoco Retail Heat's distribution network will expand Superior's fuel distribution footprint into the United States, Superior's Chief Executive Grant Billing said in a statement.
The company said it agreed to sell 4 million common shares at C$11.35 a share to a syndicate of underwriters co-led by TD Securities Inc, Scotia Capital Inc and National Bank Financial Inc in a bought deal.
The price represents a 4 percent discount to Superior shares' Tuesday close on the Toronto Stock Exchange.
The offer is expected to close on or about Sept. 23, the company said.
The underwriters will have an over-allotment option to buy 595,500 shares, up to 30 days after closing of the offering. If the over-allotment option is exercised in full, the total gross proceeds will be about C$52 million, the company said.
(Reporting by Koustav Samanta in Bangalore; Editing by Unnikrishnan Nair)