Canada's largest lubes producer will be added to HollyFrontier's portfolio.
The deal, announced on the last day of October 2016 and subject to government approvals, sees the Dallas-based independent petroleum refiner become the fourth largest lubes producer in North America, boosting its overall capacity to 28,000 bpd, equating to 10% of total production in the region.
HollyFrontier Corporation agreed to pay CAD$1.125bn ($845) to Petro-Canada owner, Suncor Energy and will fund the deal with a combination of cash and debt finance.
The acquisition includes Canada's largest base oil production plant in Mississauga, with a 15,600bpd capacity and North America's only high margin Group III base oil output. It also produces a range of finished lubricants, including specialist productrs and white oils.
According to HollyFrontier, the plant generated some $150m of EBITDA over the year from June 2015-16.
As part of the deal, the US company will also add R&D, global sales, distribution and a brand portfolio to its already sizeable refining business.
George Damiris, President and CEO of the new owners, commented, “This transformative acquisition will diversify HollyFrontier with the addition of a differentiated high margin business with more stable cash flows. Petro-Canada Lubricants is a great business, which combined with our existing Tulsa Lubricants business creates scale and will create a strong platform for growth."