LAVAL, Quebec & DUBLIN -- Following through on a promise to use the 2012 Statoil acquisition as a platform for European growth, Alimentation Couche-Tard Inc. has signed an agreement to acquire Ireland's leading convenience and fuel retailer Topaz Energy Group Ltd.
The deal, if consummated, follows Topaz’s successful acquisition of Esso Ireland’s fuels and convenience business in Ireland, which closed Dec. 1.
Dublin-based Topaz now has 464 gas stations, including those in its recently acquired Esso network. Of these stations, 162 are owned by Topaz and 302 by dealers. The deal also includes a commercial fuels operation with more than 30 depots and two terminals.
"In 2012, we declared that Statoil Fuel & Retail would be our platform for growth in Europe. This agreement to acquire Topaz's network and assets, our second announcement in Europe this year following the Danish Shell deal, would allow us to add yet another high-quality network to our operations," said Brian Hannasch, president and CEO of Couche-Tard. “We have been looking at this market for several years. With the addition of Topaz, we would expand our geographic footprint into what, today, is one of Europe's best performing economies."
Emmet O’Neill, CEO of Topaz, described the transaction as a “game changer” for the retail sector in Ireland.
“Couche-Tard is one of the strongest names in retail in the world, and their presence in Ireland will transform the retail sector here. I am thrilled that they have chosen Topaz as the foundation for their entry to the Irish market. They will bring enormous skill, energy and resources to this business and this market,” he said.
O’Neill said that the deal followed a transformation of the company over the past two years. “Topaz has moved from being a challenged business to one which has been transformed at every level and which now leads the market here," he said. "We have refinanced the company, upgraded the infrastructure, acquired and built new sites and convenience stores and ultimately acquired the business of Esso in Ireland. Today’s transaction is a reflection of the immense effort made by everyone on the team and across the company over that time.”
Jacob Schram, Couche-Tard's group president for Europe, said, "As part of the larger Couche-Tard merchant family, and with the strong, global Circle K brand in our portfolio, we are well-equipped to take on this significant market. Topaz would be a great strategic fit for Couche-Tard, and it would strengthen our position in Western Europe. It has an extensive and attractive convenience and fuel network, with good locations, quality forecourts and stores, an excellent food offering and very professional teams."
As reported in a 21st Century Smoke/CSP Daily News Flash, the transaction consists the purchase of the majority share capital (more than 99.86%) of Topaz Energy Group Ltd. (TEGL) and Resource Property Investment Fund plc (RPIF), as well as the entire share capital of Esso Ireland Ltd.
The companies expect the transaction to close in the fourth quarter of Couche-Tard's fiscal year 2016, subject to the usual regulatory approvals and closing conditions. It would be financed using Couche-Tard's available cash and existing credit facilities.
The parties have agreed not to disclose the purchase price for this acquisition.
Formed in 2005, Topaz first operated under the Statoil and Shell brands. In 2006, it acquired the Statoil gas stations in the Republic of Ireland. The company continued to trade under the Shell, Statoil and Fareplay brands. Beginning in 2008, Topaz began replacing these brands with its own Topaz Re.Store and Topaz Express flags, retiring the Fareplay brand, to which it owns the worldwide rights.
Concerning the Esso deal, O’Neill, said, “In just 10 years, Topaz has successfully taken on and bought out the Irish retail businesses of three of the largest oil companies in the world (Shell, Statoil and now Esso) to create a truly significant and innovative Irish business and a major Irish employer. This deal adds real substance to our operations here. … We believe there is real scope to develop this business further.”
That development will now come as part of Couche-Tard’s global adoption of the newly redesigned Circle K brand.
Laval, Quebec-based Couche-Tard's network includes 8,006 convenience stores in North America, including 6,579 stores offering fuel. Its North American network consists of 15 business units, including 11 in the United States covering 41 states (most currently branded Circle K or Kangaroo Express) and four in Canada covering all 10 provinces (most currently branded Mac’s and Couche-Tard).
In Europe--through its 2012 acquisition of Statoil Fuel & Retail and its 2015 acquisition of Shell Denmark--Couche-Tard operates a broad retail network across Scandinavia (Norway, Sweden and Denmark), Poland, the Baltics (Estonia, Latvia and Lithuania) and Russia. It has 2,217 stores, the majority of which offer fuel and convenience products, while the others are unmanned automated stations that offer fuel only. Couche-Tard operates key fuel terminals and fuel depots in six European countries.
In addition, about 4,700 stores are operated by independent operators under the Circle K banner in 14 other countries or regions worldwide (China, Costa Rica, Egypt, Guam, Honduras, Hong Kong, Indonesia, Japan, Macau, Malaysia, Mexico, the Philippines, the United Arab Emirates and Vietnam) which brings to more than 14,900 the total number of sites in Couche-Tard's network.
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