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    Couche-Tard Continues Search For North American Acquisitions

    Parent of Circle K is looking specifically for 25- to 50-store purchases, CEO says.

    By Brian Berk, Convenience Store News

    LAVAL, Quebec -- Alimentation Couche-Tard Inc.'s 2013 fiscal first quarter was certainly a memorable one regarding acquisitions.

    During its most recent quarter ended June 30, the large convenience store chain closed its acquisition of Statoil Fuel & Retail ASA for $2.58 billion and bought 56 stores in the United States.

    "We once again changed the face of the company on a continent where we had no presence until now," Alain Bouchard, Couche-Tard's CEO, said during the company's earnings call this afternoon, referring to Statoil's massive convenience store presence in Europe. "The acquisition should immediately contribute to earnings."

    The Laval, Quebec-based company will continue to be aggressive regarding acquisitions. Bouchard said Couche-Tard is still looking into more North American acquisitions. "We are looking at 25- to 50-store [acquisitions] in North America," he said. "We have looked at bigger acquisitions, but they [haven't] met our criteria."

    Bouchard added that Couche-Tard will look to "divest non-core assets" of its business to reduce the debt that acquisitions have and will cause. Reducing debt would also help maintain Couche-Tard's credit rating, or the rate at which the c-store chain can borrow money. Standard and Poor's currently rates Couche-Tard's debt as BBB-.

    As for Couche-Tard's overall earnings, the company earned $173 million for its 2013 fiscal first quarter, compared to a net profit of $142.7 million during the same timeframe last year.

    Revenues at Couche-Tard's Circle K U.S. stores were up across the board. Merchandise and service gross profit increased to $362.9 million, vs. $336.6 million in 2012's fiscal first quarter. Road transportation and fuel gross profit improved to $220.2 million vs. $160.4 million last year.

    U.S. in-store merchandise sales rose 2.8 percent. "Foodservice sales were more than enough to compensate for tobacco," said Bouchard. "We have not abandoned tobacco. We are attempting to maintain margins [in that category]."

    Raymond Paré, Couche-Tard's vice president and chief financial officer, added that Crowne, the company's private label tobacco business, is a "good solution" to counteract the difficult tobacco margin environment in the United States.

    Looking ahead, Paré was very bullish about Couche-Tard's foodservice offerings. "Our foodservice progress has been great," he said. "Foodservice is still in the early stages and will improve."


    By Brian Berk, Convenience Store News
    • About Brian Berk Brian Berk is managing editor of Stagnito Business Information's Convenience Store News and Convenience Store News for the Single Store Owner, where he specializes in covering motor fuels, technology and financial news. He has served the magazine industry for 14 years and has also worked in the radio and newspaper fields. Berk holds a bachelor's degree in communications from the State University of New York at Cortland and a master's degree in journalism from Quinnipiac University in Hamden, Conn.

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