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HUDSON, Ohio -- Alimentation Couche-Tard Inc. (ACT), the Laval, Quebec-based retailer that has rapidly expanded into the United States, was given license to continue its southern base after a federal bankruptcy court approved its $80 million bid for Dairy Mart Convenience Stores Inc.
ACT, Canada's largest convenience store chain, is expected to acquire the majority of Dairy Mart's 450 stores by Aug. 20. The rest will be closed, but specific locations have not been announced, the company said.
Proceeds from the sale will pay off Dairy Mart's debts and claims, ACT said. Dairy Mart filed for Chapter 11bankruptcy protection earlier this year.
The deal will knock Dairy Mart from the Convenience Store News list of Top 50 largest c-store chains, while boosting ACT to one of the five biggest chains in the convenience store and petroleum marketing industry with more than 2,300 units, including a powerful presence in the Midwest with the Dairy Mart and Bigfoot stores.
ACT jumped into the Midwest market last year when it acquired 227 Bigfoot stores from Johnson Oil Co., in addition to smaller purchases in the region. Dairy Mart's stores will strengthen its presence in Ohio, Kentucky, Pennsylvania, Michigan and Indiana.
The strategy is paying big dividends for ACT. While Big Oil and other traditional U.S. convenience store operators reported poor earnings for the second quarter, ACT last month said its push into the United States helped it post sharply higher profits and sales. The company also split its shares 2 for 1 on July 19 to increase the liquidity of its stock, which has enjoyed a steady climb over the past year.
ACT said it earned $5.8 million for the quarter, up from $4.13 million, in the year-earlier period. Sales improved to $866.2 million from $571.3 million, the company. "Last year's acquisitions immediately yielded outstanding benefits, as reflected by our strong growth in sales and net earnings, while also positioning us solidly in the Midwest where we continue to expand," chief executive Alain Bouchard said in a release last month.