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LAVAL, Quebec — Calling it too good to pass up, Alimentation Couche-Tard Inc. CEO Brian P. Hannasch said acquiring CST Brands Inc. for $4.4 billion in its biggest merger and acquisition deal ever was an opportunity to add one of the few remaining North American convenience store chains that operates 1,000 store or more.
“We believe it creates significant value for our shareholders in terms of significant earnings-per-share accretion and strong free cash generation, while giving us the capacity to continue to invest in the existing business,” he said.
The transaction, once approved, will make Circle K parent Couche-Tard the largest independent U.S. convenience store operator in the United States in terms of company-operated stores. As part of the deal, Couche-Tard will acquire 1,146 CST Brands c-stores, primarily operating under the Corner Store, Nice N Easy and Flash Foods brand names.
Couche-Tard will also control the general partner of Allentown, Pa.-based CrossAmerica Partners LP.
Once the deal is approved by CST shareholders, as well as Canadian and U.S. authorities, Couche-Tard will sell CST Brand’s Canadian retail assets to Parkland Fuel.
Hannasch noted the markets of Georgia — where Couche-Tard currently has no presence — and Texas, where Couche-Tard only has a limited presence, were especially desirable.
“It’s really a great fit,” he said. “We really had a gap in Georgia where CST has Flash Foods stores. And Texas is a fast-growing market.”
In fact, once the transaction closes, Couche-Tard will have a strong presence in nearly all regions of North America, with the only exceptions of some pockets in the U.S. Mid-Atlantic region and the upper U.S. Midwest, consisting of the states of Idaho, Montana, North Dakota, South Dakota, Nebraska, Wyoming and Utah.
Couche-Tard shares CST Brand’s passion for great customer service, Kim Lubel, CEO and president of CST, said during her press conference comments.
“Joining this platform is helping us join a journey to be the world’s preferred stop for convenience and fuel,” she commented. “I’m very happy to see this next chapter begin as our network joins with Couche-Tard.”
Responding to a question posed by the media, Hannasch responded it is possible that in areas in which Couche-Tard and CST Brands locations overlap, there could be a merging of two stores into one. But he stressed no such decisions have been made, and therefore there are no definitive plans to do so.
“We’re excited about the opportunity with CST and [CrossAmerica],” concluded Hannasch.
Pending shareholder and regulatory approval, the acquisition will be completed in 2017’s first quarter. Couche-Tard has been on quite an acquisition spree in the past couple of years, including Kangaroo Express parent The Pantry Inc. and Ireland’s Topaz Energy Group Ltd.