January 20, 2010 / 2:50 PM / in 8 years

UPDATE 2-Superior Plus buys US propane distributor; cuts outlook

* To buy Griffith for $125 mln

* Sees deal adding to 2010 operating cash flow by C$0.05/shr

* Cuts 2009, 2010 adjusted operating cash flow view

* Shares down as much as 4 pct (Recasts; Adds details, updates share movement)

Jan 20 (Reuters) - Superior Plus Corp SPB.TO is expanding its refined fuels business in the United States with a deal to buy Griffith Holdings Inc for $125 million, but the propane distributor cut its 2009 and 2010 outlook as the economic downturn continues to weigh on its results.

The Alberta-based company slashed its 2009 and 2010 adjusted operating cash flow (AOCF) per share outlook, citing continued impact of recession on customers and lower propane distribution and heating oil volumes.

Superior cut its AOCF outlook for 2009 to C$1.80 per share from its prior view of C$1.90 to C$2.05 per share. It also cut its 2010 AOCF forecast to C$1.95 to C$2.15 per share from C$2.05 to C$2.25 per share.

The company said the deal, which is expected to close by Wednesday, would add about 5 Canadian cents per share to its 2010 adjusted operating cash flow.

New York-based Griffith distributes propane, heating oil and motor fuels through 27 branch locations, 26 bulk storage depots and three storage terminals, Superior said in a statement.

The deal was financed with proceeds from its existing revolving-term bank credit facility and the company now has about C$64 million of undrawn credit capacity available under its C$570 million syndicated credit.

Superior said it plans to pursue additional acquisition and consolidation opportunities in the highly fragmented heating oil and propane distribution industry in north-eastern United States and eastern Canada.

Superior, which has been expanding in the United States, bought retail heating oil assets and propane distribution assets from Sunoco Inc SUN.N in September and Griffith Energy Services assets in December last year.

Shares of the company were off 4 percent at C$14.30 in late morning trade Wednesday on the Toronto Stock Exchange. ($1=1.033 Canadian dollar) (Reporting by R. Manikandan in Bangalore; Editing by Ratul Ray Chaudhuri)

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