Couche-Tard's Acquisition Focus

Smaller buys keeping retailer busy, below the radar in United States

Steve Holtz, Editor in Chief, CSP Daily News

Alain Bouchard

LAVAL, Quebec -- Thirty-five stores here, 18 stores there and another 56 stores somewhere else. Alimentation Couche-Tard Inc.'s growth in North America has continued at a methodical pace even as its major acquisition in Europe drove headlines for the Canadian retailer, parent company of Circle K convenience stores in the United States.

And that's like to remain the pace of growth as Couche-Tard reviews synergies and efficiencies in its new European assets, the 2,300-store Statoil Fuel & Retail chain.

"We once again changed the face of the corporation by entering into a new journey on a continent where we had no presence up to now," president and CEO Alain Bouchard said on a conference call this week. "For the next few months, a large part of our time will be devoted to traveling in Europe with the objective of identifying the most significant opportunities there in terms of growth, synergies and business efficiency."

But executives aren't taking their eye off the ball in the United States, where the company is reviewing "smaller [acquisition] files, 20 to 50 stores. We are always active in North America," Bouchard said. "That's mostly what we're looking at right now. We've seen larger files, but they generally don't meet our criteria."

During its first quarter of fiscal 2013, Laval, Quebec-based Couche-Tard added 35 company-operated stores through acquisitions and construction of new stores and 18 stores operated by independent operators.

"Subsequent to the quarter, we signed agreements for the acquisition of an additional 56 company-operated stores," Bouchard said. "We also continued to improve the quality of our network through the divestment of 27 company-operated stores within the quarter."

He added, "These stores didn't provide us with the level of performance we expect and were part of our regular review process of the network in order to focus on the best assets. Combined with our new investments, these divestitures should improve our return."

As of July 22, 2012, Laval, Quebec-based Couche-Tard's network included 6,109 c-stores throughout North America, including 4,534 stores with fuel dispensing. At the same date, Couche-Tard had agreements for the supply of motor fuel to 357 sites operated by independent operators. Its North-American network consists of 13 business units, including nine in the United States covering 40 states and the District of Columbia (under the Circle K banner) and four in Canada covering all 10 provinces (under the Couche-Tard and Mac's banner). Through its acquisition of Statoil Fuel & Retail, Couche-Tard also operates a broad retail network across Scandinavia (Norway, Sweden, Denmark), Poland, the Baltics (Estonia, Latvia, Lithuania) and Russia with 2,307 stores as at June 30, 2012, the majority of which offer fuel and convenience products while the others are unmanned automated gas stations.

For a complete look at Couche-Tard's first-quarter operating results, see Related Content below.

Steve Holtz, CSP/Winsight By Steve Holtz, Editor in Chief, CSP Daily News
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