Couche-Tard Inks 322-Site Deal With ExxonMobil
LAVAL, QUEBEC, Canada -- Alimentation Couche-Tard signed a pact to acquire 322 locations plus 65 reseller contracts in Southern California from ExxonMobil. A confidentially agreement between the two prohibits either side from revealing the deal's price tag at this time.
Couche-Tard signed the agreement through its wholly owned indirect subsidiary Circle K Stores Inc. The transaction is expected to close in stages between the fourth quarter of this calendar year and the second quarter of 2012.
Seventy-two of the stores are company operated and 250 are dealer operated, according to a news release issued this morning. In total, Circle K would own the real estate for up to 202 of the locations. Under California law, ExxonMobil still needs to present a "bona fide" offer to the 165 fee property dealers. Circle K would still get the branded supply agreement if any of the dealers choose to buy the property. The balance of the sites would be leased.
All the convenience stores included in the deal sell Mobil-branded fuel; and the deal includes the assignment of the supply and branding contracts for Mobil-branded fuel for 65 reseller locations. All 387 locations will continue to carry Mobil-branded fuel.
The 72 company-owned sites will carry the Circle K flag and the entire network will be part of Couche-Tard's West Coast Division network. The dealer-operated locations will continue to be operated by the current dealers.
"Subsequent to this transaction, our network in the Circle K West Coast Division would include a total of 228 company-operated and 315 dealer- or reseller-operated. These stores are high-volume, high-impact locations. They would significantly strengthen our overall footprint in this important market. Under our Worldwide Franchise Division, we already have an additional 315 Circle K-branded sites on the West Coast. We are extremely excited about the addition of these stores, employees, and dealers to our family," stated Tim Tourek, vice-president operations, West Coast Division.
Couche-Tard's acquisition activity has been heating up lately. Through another wholly owned indirect subsidiary, Mac's Convenience Stores Inc., the Canadian-based company signed an agreement to acquire 26 company-operated stores in the Mid-Atlantic region of the United States. Under the deal, which is slated to close in late summer, the company wouldown the real estate for 25 of those sites, leasing the other. In addition, Couche-Tard, through Mac's, acquired 12 company-operated stores in Ontario, Manitoba, Saskatchewan and British Columbia -- all in Canada -- from Shell Canada Products. The company owns the land and buildings for seven sites, leasing the remaining five.
And in April, Couche-Tard acquired five company-operated stores carrying the Gas City banner: one in Arizona and four in the Chicago area. The company acquired the land and buildings for three of the locations, leasing the other two.