ALBUQUERQUE, N.M. -- As Alimentation Couche-Tard continues its ascent toward the top of the North American convenience store heap, Conway Oil Co. is contemplating an exit from convenience retailing following the sale of 16 of its 24 Winners stores to the Canadian giant. The sites will be operated under the Circle K banner by Couche-Tard.
We are redirecting our focus to the wholesale line of trade and the propane business, Jim Conway, president of Albuquerque, N.M.-based Conway Oil, told CSP Daily News. We are the largest distributor of propane in east [image-nocss] New Mexico, and we are going to reallocate our capital dollars to those business lines.
The sale, announced yesterday and reported in a CSP Daily News Flash, leaves Conway with eight c-stores in New Mexico and Colorado. The three Colorado stores will go on the auction block Tuesday, September 27, through NRC Realty Advisors, Chicago. Of the future of the five stores that will remain, Conway said, We don't know. We're evaluating those currently.
The sale agreement with Couche-Tard also asks Conway to develop more retail sites in the New Mexico market. We're going to continue to develop some real estate for Circle K. That's part of our agreement, Conway said. We have eight [potential sites] in the pipeline right now.
Industry analysts say the purchase is a step toward Couche-Tard growing its market share in the New Mexico market, and Conway said the Laval, Quebec-based company did approach him with the deal. They came to us through their investment banking firm, he said. They called us and aggressively pursued things to the point where I couldn't say no.
Couche-Tard officials said the purchase is the next step in growth for Circle K's West Coast Division.
We are pleased with this opportunity, which allows us to complement the network expansion plans in the West Coast Division, Brian Hannasch, senior vice president for Western North America for Couche-Tard, said in a press release. Consistent with our development strategy, we selected these 16 stores based on the following criteria: prime locations, potential for growth and quality of people. Under our operation model and with the efficiency of our marketing programs, these 16 sites would contribute to improve profitability of the division. Subsequent to this transaction, our network in the West Coast Division will include a total of 286 stores.
Should the transaction close as planned this December, these acquisitions would add sales of approximately $66 million to Couche-Tard's revenues and contribute to its earnings on an annualized basis. The 16 c-stores in the agreement currently operate under the Winners banner with either Shell or Chevron motor fuel. Most are located in or near Albuquerque, N.M.; 10 have car washes.
Pursuant to this transaction, Couche-Tard would buy the land and buildings for 10 locations, and would lease the other six. The purchase price was not disclosed.
Alimentation Couche-Tard Inc. is the leader in the Canadian c-store industry. In North America, Couche-Tard is the fourth-largest c-store operator and the second-largest independent c-store operator. Couche-Tard currently operates a network of 4,861 convenience stores, 3,016 of which include motor-fuel dispensing, located in eight large geographic markets, including three in Canada and five in the United States.