Couche-Tard's Midwest Marathon
Purchase of 15 Illinois Speedway stores incrementally boosts chain's regional reach
LAVAL, Quebec -- With its sights set on reaching a desired 500-store threshold within each of its 11 U.S. and Canadian geographic regions, Alimentation Couche-Tard Inc. has agreed to acquire 15 Speedway convenience stores in central Illinois from Speedway SuperAmerica LLC.
The transaction, as reported in a CSP Daily News Flash yesterday, is expected to close in April, subject to standard regulatory approvals and closing conditions. The deal is being made through Couche-Tard's subsidiary Mac's Convenience Stores LLC.
"Our ongoing goal is to grow our 11 divisions to 500 stores [each]," [image-nocss] Darrell Davis, vice president of operations for Couche-Tard's Midwest Division, told CSP Daily News.
From a scale perspective, reaching a 500-store plateau is meaningful to the organization in that it provides a good degree of operational leverage within the network without being too unwieldy.
Laval, Quebec-based Couche-Tard's Circle K Midwest Division has a total of 354 company operated stores. The company operates a total network of 5,690 convenience stores, 3,440 of which include motor fuel dispensing, located in nine large geographic markets, including six in the United States covering 29 states and three in Canada covering six provinces.
The breakout of the 15 central Illinois units being acquired include three in Danville, near the Indiana border; two each in Decatur, Urbana and Springfield; and one each in Champaign, Casey, Paris, Lawrenceville, Tilton and Ottawa, Marathon Petroleum Co. LLC spokesperson Linda Casey told CSP Daily News.
Casey said the locations are all considered smaller stores in Marathon's 6,000-plus store network. "It was an unsolicited offer. As part of the agreement, all employees will be offered future employment," she said.Davis said the 15 Speedway-branded stores—none of which provides foodservice—will be converted to Marathon while simultaneously flying the Circle K banner. Pursuant to the deal, the company would buy the land and buildings for 14 locations and would assume the third-party lease for the 15 location.Being an acquisition company, Couche-Tard is prone to look closely at stores that are profitable. Davis said the 15 units are "typical stores that Speedway would operate." Neither Davis nor Casey would reveal gasoline volumes of the units. Casey did add that Marathon is "constantly looking at our stores and [evaluating] the ones that meet or don't meet our targets, and the ones that don't will likely be sold." Casey did not say if the stores being sold failed to meet these targets.Findlay, Ohio-based Marathon Petroleum has almost exactly the same number of company-owned stores in its arsenal this year (1,637) as it did same-period 2007 (1,636).
All the 15 Illinois stores are located on highly visible and well-traveled roads and occupy strategic locations within their respective trade areas, said Davis. He added that the sites are well operated with a strong management team in place. On the road to 500 Midwest stores, Davis would not give any clues regarding future growth plans in the region. "An acquisition could come up tomorrow or not for another two years," he said.