LAVAL, Quebec -- It's at it again. Alimentation Couche-Tard Inc., North America's fastest growing chain with a voracious appetite for acquisition, is vying for a venerable Midwestern chain with large store formats.
The Laval, Quebec-based chain, which ranks only behind 7-Eleven in store count among traditional convenience operators, is negotiating to acquire Village Pantry, the 160-store convenience chain owned by Marsh Supermarkets Inc., a Canadian analyst told CSP Daily News on condition of anonymity. "They're definitely interested," the analyst said [image-nocss] of Couche-Tard's bid, which would boost its store portfolio to more than 5,000, from 4,860.
Couche-Tard's policy is not to comment on speculation; however, in a recent interview with Canadian publication the Financial Post, Couche-Tard CEO and Chairman Alain Bouchard acknowledged he was eyeing a chain in the United States that operates between 150 and 200 locations.
"We have many, many different initiatives," Bouchard told the newspaper. "We're certainly looking at many files, mainly in the U.S. We get a file every week from different operators [looking to sell], of different sizes. It could be 10, 20 or 40 stores."
Bouchard added that the biggest opportunity under consideration was a larger chain with more than 150 locations, and one for which Couche-Tard had made a formal offer. "That [deal] will take at least six to nine months" to complete," he said. "It's a very long process, in the early stages. [The sellers] have to convince themselves about some things."
However, sources say movement could happen sooner.
Sale of the Village Pantry could help the financially beleaguered Marsh gain some needed relief. The Indianapolis-based regional grocer recently retained Merrill Lynch to explore strategic options, including a possible sale of its assets. Marsh operates 70 supermarkets and 160 Village Pantry stores, among other holdings.
Its c-stores are an ideal fit for Couche-Tard, which prefers larger in-store footprints, starting at 2,000 square feet. Village Pantry, which represented almost $300 million, or 17% of Marsh's fiscal 2005 revenues, features newer stores that range from 3,700 to 5,000 square feet, experts familiar with the chain told CSP Daily News. The older locations are 1,800 to 2,500 square feet. The assets are considered to be in good location, with more than 100 stores having undergone reimaging in fiscal year 2003.
"This would be a really nice pickup for Couche-Tard's Midwestern region," the Canadian analyst said. "It would put them around 600 stores in that area, a bit more than they would like" with their decentralized approach. "But one that would fit in nicely."
CSP Daily News could not reach Village Pantry officials for comment.
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