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    Couche-Tard Had Its Hands Full in Q2

    Rebranding, M&A integration efforts are well underway.

    By Melissa Kress, Convenience Store News

    LAVAL, Quebec — Active. That's the word to describe Alimentation Couche-Tard Inc.'s second quarter of its fiscal year 2017.

    As CEO Brian Hannasch pointed out during the company's earnings call Tuesday afternoon, the retailer in August reached an agreement to acquire CST Brands Inc. for approximately $4.4 billion. CST shareholders voted in favor of the transaction on Nov. 16 and it now awaits regulatory approval. Hannasch said Couche-Tard expects the deal to close before the end of the 2017 fiscal year.

    Parallel to that pact is Couche-Tard's agreement for Parkland Fuel Corp. to acquire much of CST’s Canadian assets for $750 million. 

    One week after the CST purchase announcement, Couche-Tard continued its Q2 burst of M&A activity with a deal to buy 53 company-operated sites held by American General Investments LLC and North American Financial Group LLC. These sites are located primarily in the Baton Rouge, La., market and they currently carry the Cracker Barrel convenience store banner. This deal is also expected to be completed before the close of fiscal year 2017, according to Hannasch.

    What's more in Q2, Couche-Tard gained approval of its Imperial Oil transaction in Canada and began integrating the 278 acquired sites in September. Of the newly added sites, 228 are in Ontario and the remainder are in Quebec. The rebranding of the Quebec locations is now completed; the Ontario rebranding efforts to the Circle K banner will be done next year.

    "Every acquisition is only as good as its successful integration" and the synergies that are realized from the deal, Hannasch explained.

    On the integration front, Couche-Tard's team "is still hard at work" on the integration of The Pantry Inc. And though he acknowledged it seems like the acquisition was "a long time ago," it was only about 18 to 19 months. 

    The integration of Ireland's Topaz Energy Group Ltd, which officially became part of the Couche-Tard family in early 2016, is now underway as well. 

    According to the chief executive, "regardless of the tempo of the M&A activity," the company will take the same integration approach to the CST holdings once that deal is official.

    Also regarding integration, Hannasch provided an update on the company's global Circle K rebranding initiative. At the end of the second quarter, more than 1,400 sites had been converted to the new banner — 650 of them in Europe. 

    "Amidst all the M&A and rebranding activity, our team members are focused on serving the customers," Hannasch said, adding that Couche-Tard is following a strategy of strong organic growth and disciplined M&A activity as it continues on its path to become a destination for convenience customers.

    Looking ahead to the second half of fiscal 2017, Couche-Tard will focus on organic growth with the continued rollout of the global Circle K brand and the integration of newly acquired stores.

    As of Oct. 9, Laval-based Couche-Tard's network comprised 8,001 convenience stores throughout North America, including 6,616 stores with road transportation fuel dispensing. Its North American network consists of 15 business units, including 11 in the United States covering 41 states and four in Canada covering all 10 provinces.

    In Europe, Couche-Tard operates a broad retail network across Scandinavia, Ireland, Poland, the Baltic states and Russia through 10 business units. As of Oct. 9, Couche-Tard's network in Europe comprised 2,759 stores, the majority of which offer road transportation fuel and convenience products, while the others are unmanned automated fuel sites that only offer road transportation fuel.

    In addition, under licensing agreements, more than 1,500 stores are operated under the Circle K banner in 13 other countries and territories worldwide, which brings the total network to close to 12,300 stores.

    By Melissa Kress, Convenience Store News
    • About Melissa Kress Melissa Kress joined EnsembleIQ's Convenience Store News in November 2010. Her primary beats include alcoholic beverages and tobacco. Kress has been a professional journalist since 1995. A graduate of West Virginia University, she began her career in community journalism before moving to business-to-business publishing in 2000, covering commercial real estate.

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