Mergers & Acquisitions

Couche-Tard to Acquire Holiday Stationstores

Enters six new states with deal for more than 500 stores

LAVAL, Quebec --Alimentation Couche-Tard Inc. has signed an agreement with Holiday Cos. to acquire all of the issued and outstanding shares of Holiday Stationstores Inc. and certain affiliated companies. Holiday’s assets, located in the upper Midwest, include 522 company-operated and franchised convenience stores, a food commissary and a fuel terminal.

Holiday operates 374 stores and franchisees operate 148 stores. It has a presence in 10 states -- Minnesota, Wisconsin, Washington, Idaho, Montana, Wyoming, North Dakota, South Dakota, Michigan and Alaska -- six of which are new to Couche-Tard: Idaho, Montana, Wyoming, North Dakota, South Dakota and Alaska.

With this deal, Couche-Tard will be in a total of 48 U.S. states.

All of the sites sell fuel under the Holiday brand, and the company has a strong car-wash business, with 221 locations. The company operates a food commissary that produces and provides fresh and frozen food to all stores and delivers additional fresh products to stores in the Twin Cities area. It also owns and operates a fuel terminal in Newport, Minn., which supplies one-third of the stations.

Couche-Tard said it intends to continue Holiday's operational base at the Holiday corporate headquarters in Bloomington, Minn.

"The acquisition of Holiday is a great fit for Couche-Tard and will allow us to continue to build on our geographical growth strategy,” said Brian Hannasch, president and CEO of Couche-Tard. "We believe there are tremendous synergies between the two companies and that it also gives us a great entry point into the upper Midwest and in particular a strong position in the greater Twin Cities metropolitan area, with a population of 3.5 million."

The Erickson family founded Holiday in 1928. It now employs nearly 6,000 people throughout its network.

"We are pleased to entrust Couche-Tard with carrying forward the Holiday brand and our highly successful programs. Our 90-year history and our promising future are being placed into excellent hands," said Ronald Erickson, chairman and CEO of Holiday Stationstores.

“The Erickson family and its management team have created one of the strongest, well-run companies in the northern-tier region of the U.S. with a great brand and consumer offer,” Hannasch said. “We are pleased to welcome the Holiday brand and its highly successful programs to the family."

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

The acquired business is expected to generate earnings before interest, income taxes and depreciation and amortization expense (EBITDA) of $180 million to $190 million on an annual basis, before synergies. Couche-Tard said it expects to finance the transaction by using its available cash and existing credit facilities.

The parties have signed a confidentiality agreement precluding them from disclosing the purchase price at this time for this acquisition.

Laval, Quebec-based Couche-Tard's network includes nearly 9,500 c-stores in North America, including more than 7,550 stores under the Circle K, Couche-Tard, Corner Store and other banners. Its North American network consists of 16 business units, including 12 in the United States covering 42 states, and four in Canada covering all 10 provinces.

In Europe, Couche-Tard operates a broad retail network across Scandinavia, Ireland, Poland, the Baltic states and Russia through 10 business units. It includes approximately 2,750 stores.

In addition, licensees operate close to 1,700 c-stores under the Circle K banner in 17 other countries and territories worldwide (Cambodia, China, Costa Rica, Egypt, Guam, Honduras, Hong Kong, Indonesia, Macau, Malaysia, Mexico, Mongolia, New Zealand, the Philippines, Saudi Arabia, the United Arab Emirates and Vietnam), which brings the total network to close to 14,000 stores.

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