SAN ANTONIO & CANASTOTA, N.Y. -- It started with a simple conversation on a summer day in June.
NRC Realty & Capital Advisors LLC was handling the divestment of more than 100 convenience stores not considered core to CST Brands Inc.’s rapacious growth strategy.
For months prior, NRC had been handling another project 1,800 miles away. The company was retained in Aug. 2013 as financial advisor by John MacDougall, founder and president of one of the convenience channel’s most iconic chains: Nice N Easy Grocery Shoppes. Founded in 1980, the company operates 33 stores, including some of the most profitable in the convenience channel, and a dealer network of 44 franchise units.
In late 2013, MacDougall gave NRC the green light to quietly reach out to potential buyers.
But this would be no ordinary sale.
“It was very important to John that this would not just be about the highest bidder,” shared a source close to Nice N Easy.
“There were three things very important to John,” the source said, speaking on condition of anonymity, “that the Nice N Easy name be preserved, that the employees’ jobs be safe and that whoever would be the buyer would agree to be active with the Syracuse community that John loved so much.”
CST Jumps In
While Nice N Easy was dealing with MacDougall’s failing health and eventual passing in June 2014, CST was quietly putting into place a dramatic growth strategy.
Click here to read an exclusive interview with CST CEO and chairperson Kim Bowers.
Told in June about Nice N Easy’s desire to sell, CST sprung to action.
A team quickly came together that included CST CEO and chairperson Kim Bowers, senior vice present and CMO Hal Adams, chief development officer Steve Motz, COO Tony Bartys, vice president of strategy Stephane Trudel.
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A fundamental question was whether the San Antonio concern would be vested in not only acquiring but integrating a chain based in upstate New York.
The answer was an emphatic yes.
But competition to make the purchase would be fierce. Sources not directly involved in the transaction say several major regional chains expressed interest in Nice N Easy and valued the company as a top-quartile and possibly a top-decile operation. While CST Brands declined to say how much it has agreed to pay, those sources suggested the final price could top 10x EBITDA after overhead—a figure that CSP Daily News could not verify but one that would be among the highest in convenience history.
Around this time, CST Brands had been working on another deal, one that would fast-track its growth strategy by joining forces with a master limited partnership (MLP) company. Earlier this month, CST announced the result of that deal: Its acquisition of Lehigh Gas GP LLC, the Bethlehem, Pa.-based fuel distributor, creating a tax-advantaged vehicle to grow both the retail and fuel side of its portfolio.
In addition to roughly 1,050 company-run stores in the United States, CST operates a Canadian division based in Montreal that runs some 300 stores.
Following the Lehigh Gas deal, Nice N Easy would not only fit nicely with the Montreal division, it could provide something so much more.
“We looked at Nice N Easy and really liked what we saw,” Bowers told CSP Daily News in an exclusive interview. “They have a very strong senior management team. Their foodservice program is outstanding, and they have an outstanding culture. …
“We see them as a great footprint for growth and a brand we can extend to our Canadian stores in Montreal,” she added. “As I told John [MacDougall’s] wife: To change the name of Nice N Easy would be silly on our part. They are a great brand that is very much a part of their community. This is something we hope to preserve and to grow.”
Although difficult to let go of a business founded 34 years ago, the MacDougall family and company intimates were immediately impressed with CST Brands, from both a professional and cultural perspective. Though divergent in scale, both companies share a passion for foodservice, with Nice N Easy’s program more developed, Bowers admits. Both companies publicly extol the importance of community and people.
It is remarkable, in fact, when one appreciates the number of employees with 10, 20 or more years of experience at both companies.
“Both Nice N Easy and CST Brands,” Bowers said, “are committed to great people, loyal customers and strong community ties.”
Protecting Nice N Easy
On Wednesday afternoon, shortly before CST was to publicly announce its first true convenience acquisition in the Northeast, Ron Rowland, Nice N Easy’s vice president of operations, was holding conference calls with district managers and store managers. Peter Tamburro, senior executive vice president of franchise, was informing the company’s franchise network. And on Thursday morning, Nice N Easy executives will be joined at its Canastota headquarters by members of CST’s senior management to share the news with office staff, directors and other personnel.
For Nice N Easy’s high-ranking member, Fran Duskiewicz, it has not been an easy ride. When MacDougall died, Duskiewicz—long the company’s No. 2 executive—lost not only his mentor but a very close friend. Recently, he uncomfortably accepted the title of president and CEO.
And in a moving statement, it was Duskiewicz who made clear that the sale was not a result of MacDougall’s passing, rather the company’s founder was actively involved in a move he deemed best for the future of Nice N Easy.
“John MacDougall started this process a year ago with very specific provisions about the sale that would protect the Nice N Easy Grocery Shoppes name, image, people and his legacy. It is bittersweet that we have reached this point without him with us to enjoy the potential growth of our program that we believe CST Brands will provide,” Duskiewicz said. “Company culture is everything to us, and we’ve made a decision that will allow that culture to continue and grow with a group with whom we share many business philosophies.”
In an exclusive interview with CSP Daily News Wednesday night, Elaine MacDougall, John’s wife of 34 years, shared her sentiments about selling a business the couple started just months after they married.
“I’m very excited about the sale and purchase,” she said. “I met with Kim Bowersm and she’s a very nice person, and CST is a great company. I’m just very happy they want to keep the Nice N Easy name and the Nice N Easy employees.”
She added, “We’re going to meet with staff tomorrow, and it’s going to be very positive. It’s going to be part of John’s legacy. I wish good luck to Kim and everyone involved with CST.”
For Nice N Easy, today’s news is the end of a family-run business, but the beginning of a new chapter, forged with one of the industry’s most exciting growth companies, CST Brands.
Abbey Lewis contributed to this report.
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