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HUDSON, Ohio -- One of the industry's most aggressive convenience store chains is on the verge of acquiring one of its most struggling.
Alimentation Couche-Tard Inc. (ACT), the Lavel, Quebec operator of 1,800 convenience stores in North America, said today it has entered into an agreement to acquire the majority assets of 450-unit Dairy Mart Convenience Stores Inc. for approximately $80 million in cash.
The announcement comes only weeks after Dairy Mart reported it expected a fiscal-year loss to top $63 million, more than double last year's $29.4 million.
Despite Dairy Mart's financial problems, ACT President and CEO Alain Bouchard said praised the pending deal, which must be approved in bankruptcy court.
"This transaction would give us an excellent opportunity to accelerate our business development with a second large, well-established network in a market where we already have a solid presence," Bouchard said. "After slightly over a year in the United States, that would bring us closer to our objective of 1,000 stores for our first foothold in the U.S. market."
The Canadian chain has puffed up its U.S. presence. Last year, it acquired 227 Bigfoot stores from Johnson Oil Co. And in May, it purchased the 12-store network from Bruce Miller Oil Co.
For Dairy Mart, the financially saddled operation that last year entered into bankruptcy protection, the deal would mark a close to a tumultuous two-year run in which the company's public statements of good fortunes masked heavy debt and squabbling within the corporate inner circle.
Gregory G. Landry, Dairy Mart's president and CEO, had only compliments for his would-be acquirer. "Couche-Tard is a strategic, well-capitalized, growth-oriented operator of convenience stores."
He continued: "Once final, this agreement can accelerate the progress already made by the hardworking people of Dairy Mart. This agreement speaks to the success of our employees' efforts, and to the essential viability and value of our business and the Dairy Mart brand name."
When Dairy Mart filed for Chapter 11 bankruptcy court protection last year, it listed $220.7 million in debt and assets of $190.7 million. The company recently was given until June 4 to file its plan for reorganizing its finances.