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The game plan at Superior Plus has always been clear: Use the cash thrown off by a market-dominating propane distribution business to fund acquisitions.

Execution of this strategy hasn't always been perfect: Superior di-worsified into the construction sector just in time for the U.S. real estate crash. But over all, the former income trust has churned out solid results in fuel distribution, specialty chemicals and construction. In return, investors have shown faith by stepping up for more equity when takeovers are announced.

That pattern played out again on Wednesday, when Superior closed the purchase of a propane and heating oil distributor in upstate New York, then hit up investors for $60-million to help fund the $125-million (U.S.) acquisition. The money raised in the stock sale will be used to pay down credit lines.

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Superior sold 4.35 million share at $13.85 (Canadian) each in a bought deal led by Scotia Capital, National Bank Financial and TD Securities. The shares were sold at a relatively thin 2 per cent discount to Superior's closing price; the stock hit a 52-week high of $15 last week.

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About the Author
Business Columnist

Andrew Willis is a business columnist for the Report on Business at The Globe and Mail, based in Toronto.He has been in business communications and journalism for three decades. More

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