LAVAL, Quebec -- Alimentation Couche-Tard Inc. said that it has signed an agreement through its subsidiary Circle K Stores Inc. to acquire 53 stores in Oklahoma City from Star Fuel Marts LLC. The company did not disclose the deal's price tag, citing a confidentiality agreement.
The 53 Sooner State locations, which will be converted into Circle K stores, give Couche-Tard its first stores in the Oklahoma region, CFO Richard Fortin told Bloomberg News. This is a good opportunity to enter that market because these assets are of a very high quality. We see [image-nocss] further growth opportunitiesthere eventually, he told the news service.
As reported in a CSP Daily News Flash yesterday, the 53 convenience storesStar Fuel Mart's entire corral of retail outletscurrently operate under the All Star banner and are all company operated; 29 of the stores have ConocoPhillips-branded gasoline and 24 have Shell-branded gasoline. Both gasoline brands would remain unchanged. There are 39 drive-through car washes at the locations.
The stores will be operated by the Arizona Circle K division. According to the agreement, long-term leases would be in place with the seller for 42 sites and the company would assume the 11 third-party leases for the remaining sites.
Subsequent to this transaction, our network in the Arizona Division would include a total of 672 company-operated stores, said Geoffrey Haxel, vice president of operations for the Arizona Division. The All Star sites are located on highly visible and well-traveled roads and occupy strategic locations within their respective trade areas. In addition, these sites are well-operated and have a strong management team in place. Strategically, this acquisition would be an excellent fit with our network and would complement our expansion and growth plans for the Arizona Division.
The acquisition "is reflective of the company's strategy of entering a new geography by gaining immediate scale through an established operator," Merrill-Lynch analyst Patricia Baker wrote in a research note cited by the Canadian Press.
The All Star stores were recently recognized for excellence in brewing coffee with the Golden Cup Award from the Specialty Coffee Association of America (SCAA). To be eligible for the award, the retailer must prepare its coffee according to the SCAA's precise brewing standards.
Should the transaction close as anticipated in April 2007, the Star Fuel Marts assets would add to Couche-Tard's revenues and contribute to its earnings on an annualized basis. The transaction is subject to standard regulatory approvals and closing conditions. Star Fuel Marts' total 2006 sales for the subject stores were approximately $215 million. Internal available cash dollars will pay for the transaction, Couche-Tard said.
Star Fuel Mart did not return calls from CSP Daily News by presstime.
Including with this current deal, Couche-Tardlong an acquisition juggernautover the past year or so has scooped up hundreds of retail sites:
Dec. 27, 2006: 13 stores in the Pensacola, Fla., market from Richcor Inc. Oct. 5, 2006: 236 sites from Shell Oil Products US and its affiliate Motiva Enterprises LLC, in B aton Rouge (22), Denver (71), the greater Memphis area (16), Orlando (28), Southwest Florida (46) and Tampa (53). Aug. 24, 2006: 54 stores in Ohio from Holland Oil Co. Aug. 17, 2006: 24 stores in West Central Florida from Sparky's Oil Co. June 12, 2006: 24 stores in the Monroe region of Louisiana from Moore Oil Co. LLC. April 11, 2006: 90 stores located in major markets throughout Georgia and Alabama from Spectrum Holding Inc. March 20, 2006: 6 stores in the Tallahassee, Fla., region from Capcirc Properties LLC. Feb. 28, 2006: 40 stores and 13 fuel supply contracts in the Midwest region currently controlled by Shell Oil Products US.Laval, Quebec-based Couche-Tard currently operates a network of 5,360 c-stores, 3,308 of which include motor fuel dispensing, located in nine large geographic markets, including six in the United States covering 28 states and three in Canada covering six provinces.
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