LAVAL, Quebec One day after announcing its purchase of seven stores in Ohio, Alimentation Couche-Tard Inc. and its Circle K Stores Inc. subsidiary continued growing yesterday with the purchase of 26 stores in the Memphis region of Tennessee from BP Products North America Inc.
Strategically, these acquisitions are an excellent fit with our current network in metropolitan Memphis and nicely complement our expansion and growth plans in both the Southeast Division and Memphis in particular, said Robert Campau, vice president of operations for Circle [image-nocss] K's Southeast Division. Consistent with our integration plan, we are continuing to strengthen our base operations, seizing the best expansion opportunities.
Should the transaction close as expected at the end of December, these assets would add sales of approximately $80 million (U.S.) to Couche-Tard's revenues and contribute to its earnings on an annualized basis.
The 26 convenience stores currently operate under the BP banner, 18 of which are company-owned/operated, six company-owned/dealer operated, and two dealer-owned/operated. All locations dispense BP branded fuel and shall remain as such.
Pursuant to this transaction, the company would buy the land and buildings for 22 locations, would lease two and the other two would be owned and operated by existing dealers. According to a confidentiality agreement between the parties, the purchase price cannot be disclosed at this time but it will be paid by using internal cash flow.
Earlier this year, we acquired four independent operators in the Memphis area along key growth corridors in the city, Campau said. These additional BP company-operated locations would bring our store count to 46 in the greater metropolitan area. Most of the sites acquired would be remodeled in the near future to reflect the Circle K banner. Subsequent to this transaction, our network in the Southeast Division would include a total of 289 stores, excluding the eight dealer operations.
The sale of the BP stores is part of the Big Oil company's ongoing reconciliation of its assets. In August, Warrenville, Ill.-based BP announced plans to exit the retail market in Nashville with plans to keep the BP flag flying as a branded gasoline supplier.
Alimentation Couche-Tard Inc. is the leader in the Canadian convenience store industry. In North America, Couche-Tard is the third-largest convenience store operator and the second-largest independent (not integrated with a petroleum company) convenience store operator. Couche-Tard currently operates a network of 4,861 convenience stores, 3,035 of which include motor-fuel dispensing.
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