Couche-Tard grows number of U.S. stores

Agrees to buy U.S. Midwest chain in deal

capped its fiscal year with a strong fourth quarter as its Canadian operations got a boost from the full impact of its acquisition of Esso convenience stores.

The Quebec-based owner of Circle K, Couche-Tard and Mac’s convenience stores and gas bars said its Canadian sales increased by 81 per cent from a year ago while gross profit was up 54 per cent.

Couche-Tard purchased 278 Imperial Oil Canada retail stores in Ontario and Quebec for $1.7 billion. The deal closed in October but the full impact from the acquisition was realized in the company’s fourth quarter, ended April 30.

Canada accounted for 14 per cent of Couche-Tard’s global sales in the quarter, up from 10 per cent a year earlier.

Couche-Tard followed the Esso deal by adding nearly 1,300 CST Brands stores in Canada and the U.S. in a deal that closed June 28 after the company agreed to sell about 420 locations to satisfy Competition Bureau requirements.

It also acquired 53 Cracker Barrel sites in Louisiana in May and agreed this week to buy a 522-store network in the U.S. Midwest run by Holiday Stationstores in a deal valued at US$1.5 billion to US$2 billion, according to analysts.

With the latest deal, Alimentation Couche-Tard Inc. is poised to expand its footprint to 48 states.

The transaction extends a buying spree that crossed the border 16 years ago and has now gone global.

The deal furthers the reach of a company that’s little known to Americans even though it has more than 7,000 locations in the U.S., according to industry publication CSP.

The purchase of 522 stores, a food commissary and a fuel terminal gives Couche-Tard — French for “Night Owl” — access to the upper Midwest market, including a stronghold in the Minneapolis region, and boosts its expertise in selling prepared food.

Assuming the deal is approved by regulators, a company that started with one store in a Montreal suburb in 1980 would have U.S. customers from Texas to Alaska, adding six states to its reach. While the acquisition would move Couche-Tard closer to U.S. market leader 7-Eleven, the industry is highly fragmented, with chains accounting for 37 per cent of total stores, according to a Bloomberg Intelligence report from March.