In December, Quebec-based Alimentation Couche-Tard announced a friendly deal worth $860-million (U.S.) to buy U.S. convenience store chain The Pantry Inc. This deal was the largest U.S. acquisition to date for the large Canadian-based convenience store chain and including debt, the deal is valued at $1.7-billion (U.S.).
Couche-Tard operates Canada’s largest convenience store and service station network and this latest acquisition serves to expand the company outside Canada. Cary, N.C.-based Pantry owns the Kangaroo Express banner and operates approximately 1,500 stores in the southeastern United States.
This new deal will bring Couche-Tard’s North American store count to approximately 7,800 locations. Currently, the largest North American convenience store chain is 7-Eleven, which operates, franchises or licenses 10,400 stores.
In 2010, Couche-Tard had a failed bid for U.S.-based Casey’s General Stores Inc. for US$1.4-billion. But, it has since gone on to acquire other properties.
Under the Circle K banner in the U.S., Couche-Tard currently operates 1,225 stores in the southeast, Florida and the Gulf region.
The company’s offer of $36.75 per share places a 27-per-cent premium to Pantry’s closing share price prior to the deal announcement.
Couche-Tard is acquisition hungry and company founder Alain Bouchard has stated that he may double the company’s store count to approximately 25,000 by 2023. Currently, there are approximately 13,100 outlets.
Last September, Bouchard hired Brian Hannasch as President and Chief Executive Officer. Mr. Hannasch stated, “The Pantry is an excellent company and is well positioned in the Southeastern and Gulf Coast regions of the U.S., two of the fastest growing areas of the U.S.”
Over the years Couche-Tard has completed many acquisitions and acquired various stores across North America and abroad.
The company began operations with its first store in Laval, Quebec in 1980. After a number of small acquisitions, the company purchased C-Corp. Inc. from Provigo Inc. in 1987. The company attained 245 Provi-Soir stores in Quebec and approximately 50 Wink’s stores in Ontario and Western Canada.
In 1999, the company acquired Silcorp Limited, which owned 980 stores in Ontario and Western Canada operated under Mac’s, Mike’s Mart and Beckers banners.
In 2001, the company broke into the United States with the purchase of the assets of Johnson Oil Company, Inc. The company owned 225 Bigfoot stores, all located in the U.S. Midwest. The company also purchased R-Con Centres Inc., Mac’s franchise in Manitoba.
In 2003, the company acquired Circle K Corporation from ConocoPhillips Company and added 1,663 Circle K corporate stores located in 16 states along with 627 additional franchised and licensed stores in the U.S. and worldwide.
In 2012, the company purchased Statoil Fuel & Retail for US$2.8-billion. This leading Scandinavian road transport fuel retailer operates a broad retail network across Scandinavia (Norway, Sweden, Denmark), Poland, the Baltics (Estonia, Latvia, Lithuania) and Russia. The company acquired 2,300 stores in this transaction.
Couche-Tard continues to look for expansion opportunities to expand its retail network and has experienced many years of positive financial results. This latest acquisition is in line with the company’s expansion efforts and more deals may be ahead.