Couche-Tard to buy smaller US rival The Pantry for $861 mn
19 Dec 2014
Canadian convenience store operator Alimentation Couche-Tard Inc yesterday struck a deal to buy its smaller US rival The Pantry Inc for about $861 million in order to expand its footprint in southeastern US.
Under the deal, expected to close in the first half of 2015, Couche-Tard has offered to pay $36.75 per share, a premium of 27 per cent to The Pantry's closing share price on 16 December, the last trading day prior to public media reports that The Pantry was exploring a potential deal.
Including debt, the deal is valued at $1.7 billion.
The Montreal-based company intends to fund the proposed acquisition through cash on hand, existing credit facilities and a new term loan.
Based in North Carolina, The Pantry is a leading independently operated convenience store chain in the southeastern US and one of the largest independently operated convenience store chains in the country.
The company operates 1,512 stores in thirteen states under banners, including Kangaroo Express. The Pantry's stores offer a broad selection of merchandise, as well as fuel and other ancillary services.
With annual revenues of over $15.8 billion, Quebec-based Couche-Tard operates around 6,303 convenience stores throughout North America, including 4,851 stores that offer gasoline and employs more than 60,000 people.
Its North-American network consists of 13 business units, including nine in the US covering 40 states and four in Canada covering all ten provinces. In Canada, it operates under the names Couche-Tard and Mac's and Beckers and in the US as Circle K.
It also has a network of about 4,130 licensees extending in nine other countries worldwide, including China, Guam, Hong Kong, Indonesia, Japan, Macau, Mexico, Vietnam and the United Arab Emirates.
In Europe, Couche-Tard operates a retail network of 2,239 stores across Norway, Sweden, Denmark, Poland, Estonia, Latvia, Lithuania and Russia, which offer gasoline and convenience products while the others are unmanned automated service-stations.
Couche-Tard operates key fuel terminals and fuel depots in eight countries. Including employees at Statoil branded franchise stations, about 17,500 people work in its retail network, terminals and service office across Europe.
''Brian Hannasch, Couche-Tard's president and CEO, said, ''The Pantry is an excellent company and is well positioned in the Southeastern and Gulf Coast regions of the US, two of the fastest growing areas of the US.
''With this transaction we will add more than 1,500 stores to our network, which will position us as the definitive leader in this region and will reinforce our position as one of the largest convenience store operators in North America,'' he added.
