LAVAL, Quebec, and ALLENTOWN, Pa. – In an asset exchange, Alimentation Couche-Tard Inc., through its wholly owned subsidiary Circle K Stores Inc., has agreed to sell 192 company-operated Circle K convenience stores in the United States to CrossAmerica Partners LP. CrossAmerica, which is also a wholly owned subsidiary of Couche-Tard, has agreed to sell the real estate for 56 U.S. company-operated c-stores leased and operated by Couche-Tard and 17 company-operated c-stores in the U.S. upper Midwest currently operated by CrossAmerica to Couche-Tard.
The 192 stores, of which 162 are fee-based and 30 are leased, have an aggregate value of approximately $184.5 million. CrossAmerica has agreed to sell to Couche-Tard assets also having an aggregate value of approximately $184.5 million. The companies said they expected that there will be no additional funding required as part of these transactions.
The CrossAmerica assets include properties for 56 stores currently leased and operated by Couche-Tard pursuant to a master lease that CrossAmerica previously purchased jointly with or from CST Brands Inc., and 17 company-operated stores currently owned and operated by CrossAmerica in the upper Midwest.
The existing fuel supply arrangements for the 56 master lease properties will remain unchanged.
The Circle K retail stores to be sold to CrossAmerica will remain with Couche-Tard until dealers are secured to operate the sites. The companies will exchange the assets in a series of transactions over a period of up to 24 months, as dealers are secured to operate the Circle K stores for CrossAmerica. The process of identifying qualified dealers is already underway . The companies expect the first transaction to occur in the first half of 2019.
The asset exchange agreement was approved by the CrossAmerica board of directors following the approval of the terms of the transaction by its independent conflicts committee. The closing of each asset exchange transaction is subject to customary closing conditions.
“We believe this transaction will be beneficial to both parties. The transfer of Couche-Tard’s retail stores to CrossAmerica will help optimize the long-term value of these assets, further strengthens Couche-Tard’s core retail business and is a win-win for both sets of stakeholders,” said Brian Hannasch, president and CEO of Couche-Tard.
"We are very excited about this first asset exchange with Couche-Tard and the substantial benefits it provides to the partnership,” said Gerardo Valencia, CEO and president of CrossAmerica. “This transaction provides further diversity to our wholesale network, an important step in our goal of simplifying the business and cash flow streams. As partners, we took the necessary time to secure a plan that will allow for an easy transition of these sites from Couche-Tard to CrossAmerica and add value for all stakeholders.”
Allentown, Pa.-based CrossAmerica is a wholesale distributor of motor fuels and owner and lessor of real estate used in the retail distribution of motor fuels. Its general partner CrossAmerica GP LLC is a wholly owned subsidiary of Couche-Tard. Formed in 2012, CrossAmerica distributes branded and unbranded fuels in the United States to approximately 1,300 locations and owns or leases approximately 900 sites. With a geographic footprint covering 31 states, CrossAmerica has relationships with oil brands such as ExxonMobil, BP, Shell, Chevron, Sunoco, Valero, Gulf, CITGO, Marathon and Phillips 66.
Laval, Quebec-based Couche-Tard’s network includes 9,943 c-stores in North America under 19 business units, including 15 in the United States covering 48 states and four in Canada covering all 10 provinces. It is No. 2 in CSP’s 2018 Top 202 ranking of c-store chains by number of U.S. company-owned retail outlets. Its network includes approximately 8,350 c-stores in the United States under the Circle K, Holiday and other brands. It has a total worldwide network of about 16,000 stores.
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