LAVAL, Quebec-- Alimentation Couche-Tard's acquisition yesterday of the venerable 90-store Spectrum convenience stores moors the Canadian retailer as a dynamic presence in the Southeastern tier and lays further evidence of a Couche-Tard versus The Pantry acquisition battle for dominance of the country's most desirableand fragmentedmarkets.
In just the past 18 months, Couche-Tard, with its Circle K brand, has made significant penetrations into the South, especially Georgia, where it previously acquired about 90 Smile and Pump N Shop locations in two separate [image-nocss] deals.
When you look at our market dominance in Augusta, Columbus, Macon, there's a lot of synergies, said Bob Campau, operations vice president for Laval, Quebec-based Alimentation Couche-Tard's U.S. Southeast Division. Spectrum has stores in Georgia and Alabama and is particularly strong in Columbus [Ga.] where they have 40 stores.
This is a good strategic fit for us, he told CSP Daily News. The acquisition of Spectruma 40-year-old outfit that, according to its website, generated $380 million in sales last year and markets approximately 152 million gallons of fuel under major and private brandsnot only bolsters Couche-Tard's regional focus, but further expectations that Couche-Tard, with holdings of nearly 5,000 stores, will likely surpass 7-Eleven this year as the largest convenience chain in North America.
Campau was headed Tuesday to Spectrum headquarters in West Point, Ga., to meet with some of the 850 new employees switching uniforms. We want to recognize them for their past accomplishments. They have a successful history that spans more than 35 years, he said, praising Spectrum's dynamic President and CEO Albert Woody Woodroof III, one of the channel's most prominent players.
Our objective in going to West Point, Campau continued, is to make them feel important and put them at ease on the important things to themtheir wages, their benefits and their families.We have a philosophy that people are the number one assets. Spectrum has good people and we look forward to having them part of our company.
Georgia On My Mind
State operators and officials familiar with the deal were quick to draw the same conclusion: The South is up for sale.
While that may be a bit exaggerated, many of the best-known operators, certainly those with a Georgia presence, have sold been picked up by Couche-Tard or The Pantry in the past few years, most recently including D&D Oil, Boardman and Golden Gallon, which while based in Tennessee, was strong in Georgia.
Indeed, one official familiar with yesterday's transaction, noted, Spectrum is a top-quality chain and a perfect fit for Couche-Tard. For Couche-Tard, it's very strategic and puts them in competition with The Pantry.
And some Georgia convenience executives expect the drumbeat of acquisitions to continue.
Between Couche-Tard and The Pantry you're seeing a lot of acquisitions in our state, observed Jim Tudor, president of the Georgia Association of Convenience Stores (GACS). If it's in their strategic plans that they want to own Georgia, then that's based on a scenario that there are some chains available.
He added, A lot of the really good stuff has already been bought and is off the table. But there are still good ones left.
Others interviewed agree that the market seems ripe for additional deals, especially for operators looking to retire or reinvest in another line of work. Still, they were quick to point to several home-grown chains that appear strong and are not on the market, such as Golden Pantry, Flash Foods, Jet Food Stores and Calfee Co. (Favorite Markets).
Tudor, who a half-dozen years ago decried the buying frenzy that was being leveraged by debt-financing, does not see the same concerns today.
These companies, he said of Couche-Tard and The Pantry, are investing in the market, as opposed to exiting it. They have money and good credit, as opposed to the consolidation we were going through four to five years ago when those companies (Swifty Serve and Convenience USA) were borrowing on debt and looking to get out as soon as they could.
As for the Spectrum deal, the transaction is expected to close in June. Trefethen & Co. LLC served as Couche-Tard's financial advisor, while Morgan Keegan & Co. Inc., represented Spectrum.
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