The 9 Biggest M&A Stories of the Year So Far

CHICAGO -- With the year only half over, it can already be said that 2017 will be considered a big year for convenience-store mergers and acquisitions (M&A). The two biggest players in the business made their marks on the calendar and the map with multibillion-dollar deals that changed the face of the industry and realigned several major brands.

And there has been no shortage of sizeable acquisitions by new and existing retailers. So if the second half of 2017 comes anywhere close to the first half, there are more deals and surprises to come.

Here are the most notable acquisitions for the first six months of 2017 …

The biggest deal of the first half of the year involved six companies and sent transactional ripples through the c-store industry in two countries.

Alimentation Couche-Tard Inc., Laval, Quebec, announced in August 2016 that it would acquire San Antonio-based CST Brands Inc. and its Allentown, Pa.-based master limited partnership (MLP) CrossAmerica Partners LP for $4.4 billion.

The deal, involving approximately 2,000 stores, closed on June 28.

To head off competitive issues, Couche-Tard agreed to sell 71 properties to Empire Petroleum Partners LLC, Dallas.

Meanwhile, Getty Realty Corp., Jericho, N.Y., entered into an agreement for acquisition leaseback funding to Empire, which will acquire fee-simple interests in 49 of the properties for $123 million.

Also in June, Couche-Tard finalized a deal with Parkland Fuel, Red Deer, Alberta, to divest 159 of CST’s c-stores in Canada for approximately $750 million to head off competitive issues there.

Along with the Circle K brand in the United States, Couche-Tard now owns CST’s Corner Store, Nice N Easy and Flash Foods brands, as well as The Pantry Inc.’s Kangaroo Express brand. All are at various stages in the process of being converted to Circle K.

The next biggest deal of the first half of the year saw a longtime c-store operator largely withdraw from retail and sell another recently acquired well-known c-store brand to a major U.S. retailer with a Japan-based parent company.

In April, Irving, Texas-based 7-Eleven Inc., which is a unit of Tokyo-based Seven & i Holdings Co. Ltd., said it will acquire approximately 1,100 company-operated c-stores from Sunoco LP in 18 states—110 in Florida, 450 in New York and 550 in Texas—for $3.3 billion. It is also acquiring the trademarks and intellectual property of the Stripes c-store brand and the Laredo Taco Company foodservice brand, which Sunoco gained when it purchased Susser Holdings Corp. for $1.9 billion in 2015.

Dallas-based Sunoco is shifting its focus away from retail and toward wholesale fuels distribution, although it is retaining its APlus franchise operations and Aloha Petroleum.

With the sale of the sites to 7-Eleven, Sunoco also announced that it would sell 208 Stripes c-stores in western Texas, New Mexico and Oklahoma in a separate auction process. These stores are located in markets where 7-Eleven is “prohibited from operating convenience stores,” Sunoco said.

In another major deal for Couche-Tard, the Canadian chain in July agreed to acquire 522 Holiday Stationstores from Bloomington, Minn.-based Holiday Cos. for an undisclosed price.

The companies said that they expect the transaction to close in the fourth quarter of Couche-Tard's fiscal-year 2018, subject to Holiday shareholder approvals, customary regulatory approvals and closing conditions.

Holiday has a presence in 10 states in the upper Midwest and West—Minnesota, Wisconsin, Michigan, Alaska, Montana, North Dakota, South Dakota, Washington, Idaho and Wyoming. Six of these states—Alaska, Idaho, Montana, North Dakota, South Dakota and Wyoming—are new to Couche-Tard. When the deal closes, the company will have stores under several banners in 48 states, the largest c-store footprint in the United States. The only states that will not have a Couche-Tard presence will be Nebraska and Utah.

In July, Kwik Trip Inc. signed an agreement to acquire the assets of PDQ Food Stores Inc., an employee-owned company based in Middleton, Wis. Its assets include 34 company-operated convenience stores located in Southeastern Wisconsin.

The transaction is scheduled to be completed in early October and is subject to PDQ employee approval and other customary closing conditions.

La Crosse, Wis.-based Kwik Trip plans to operate the acquired stores under the existing PDQ banner until it completes planned remodeling and reimaging in mid-2018. The company estimates that it will spend between $30 million and $40 million to convert the stores to the Kwik Trip brand.

Tesoro Corp. closed its acquisition of Western Refining Inc. on June 1. The $6.4 billion, stockholder-approved deal, which Tesoro announced on Nov. 17, 2016, creates a geographically diversified refining, marketing and logistics company. It adds Western's refineries in Texas, New Mexico and Minnesota to Tesoro's existing refineries in California, Washington, Alaska, Utah and North Dakota. The combined retail operations will include more than 3,000 gas stations and convenience stores operating under 12 brands in 18 states.

As it closes on its acquisition of Western Refining, Tesoro will change its name to Andeavor on Aug. 1. Andeavor will continue to license the Tesoro brand to retail stations. The company said it does not intend to make the Andeavor name part of its retail portfolio.

In a deal that shifted ownership of approximately 300 c-stores in the Southwest from one Israel-based parent company to another, Delek U.S. Holdings Inc. became the largest U.S. 7-Eleven licensee on July 1 when it took ownership of Alon USA, closing on the acquisition of the remaining outstanding shares of Alon USA Energy Inc. common stock in an all-stock transaction valued at $464 million.

With U.S. headquarters in Brentwood, Tenn., Delek U.S. is a unit of Netanya, Israel-based Delek Group. With U.S. headquarters in Dallas, Alon USA was a unit of Yakum, Israel-based Alon Israel Oil Co. Ltd.

Delek U.S. closed the transaction to sell about 350 c-stores under the Mapco Express, Mapco Mart, East Coast, Fast Food and Fuel, Favorite Markets, Delta Express and Discount Food Mart brands to Santiago, Chile-based Compania de Petroleos de Chile COPEC SA (COPEC) for $535 million in November 2016.

And in yet another sizeable deal for a foreign-based company, in early July, Irish retailer Applegreen PLC agreed to acquire the 38-unit Pitt Stop convenience-store chain based in Columbia, S.C., from The Brandi Group for $5.4 million.

The acquisition, which also includes eight stand-alone quick-service restaurants (QSRs), will essentially triple the size of Dublin-based Applegreen’s U.S. c-store network, which currently has 14 stores on the East Coast.

The deal is subject to conditions, and the parties expect to complete the transaction in fourth-quarter 2017.

Upon completion, Applegreen will enter into a sale-leaseback agreement with Getty Realty for the 38 c-stores for $70.1 million.

Applegreen executives have said that they have other U.S. acquisition deals in the works and are in talks with other parties.

New convenience-store retailer Yesway expanded with the acquisition in May of 35 Wes-T-Go and Chillerz Convenience Stores in Abilene, Texas.

And earlier in 2017, Yesway added two convenience stores in Iowa and five in Kansas. It acquired five Pic Quik stores in Hutchinson, Kansas—its first in the state—as well as the Krueger's Convenience Stores location in Grimes, Iowa, and the Pronto Market in Kanawha, Iowa.

West Des Moines Iowa-based BW Gas & Convenience Holdings LLC, doing business as Yesway, is a unit of private-equity investment firm Brookwood Financial Partners LC, Beverly, Mass. It opened its first c-stores in 2016 with the acquisition of portfolios from Country Stores and Kum & Go and now operates 73 locations.

In February, Stinker Stores Inc. has acquired Bradley Petroleum Inc. and Sav-O-Mat Inc. in a deal that includes 40 convenience stores in Colorado and one in Wyoming.

Most of the units are branded Bradley, while about a half-dozen are branded Sav-O-Mat. For the near term, Stinker Stores is going to retain the Bradley and Sav-O-Mat brands.

The deal allowed Boise, Idaho-based Stinker Stores to expand into those new states.

Denver-based Bradley Petroleum exited the c-store business with the sale.