Couche-Tard Scoops Up 28 Sterling Stores

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Couche-Tard Scoops Up 28 Sterling Stores

LAVAL, Quebec -- Through its subsidiary, Mac's Convenience Stores LLC, Alimentation Couche-Tard Inc., operator of 5,360 convenience stores in North America, signed an agreement to acquire 28 stores in northwest Ohio from Sterling Stores LLC.

Total 2006 sales for those 28 stores were approximately US $170 million. All 28 stores are company-owned and operate under the Sterling banner. Unbranded gasoline is sold at 24 of the sites and the remaining four locations offer BP-branded fuel.

"The 28 stores are located on highly-visible and well-traveled roads and occupy strategic locations within their respective trade areas," Paul Rodriguez, vice president of operations for Circle K's Great Lakes Division, said in a written statement. "In addition, these sites are well operated and have a strong management team in place. Strategically, this acquisition would be an excellent fit with our network and would complement our expansion and growth plans for the Great Lakes division."

The Sterling chain began in Wauseon, Ohio in 1934, when Peter Goldsmith started a delivery company called Sterling Milk Co. that offered milk, eggs and other products for home delivery. The company opened its first convenience store in 1950 and dropped its delivery service seven years later. In 2002, the company was bought by Holmen, Wis.-based Nesnah Ventures LLC. Three years later, one of its stores in Toledo was the first in the area to sell a high-ethanol blend of fuel, according to a report in The Toledo Blade.

A Sterling official advised town Mayor Jerry Dehnbostel of the sale, and the possibility that its corporate offices and adjacent milk-bottling plant would close. While the future of a warehouse in Delta, Ohio is still unknown, the employees at the chain's stores will not be affected, Dehnbostel told the newspaper.

After the deal closes, the stores will be converted to the Circle K banner and will be operated by the Circle K Great Lakes division. Unbranded fuel locations will sell fuel under the Circle K brand and the BP gasoline brand will remain unchanged at the remaining four locations.

As part of the transaction, Couche-Tard said it will buy the land and buildings for 26 locations and purchase the buildings and assume the third-party land leases for the other two locations. In addition, a long-term land lease will remain in place for one of the properties, while another property's lease agreement contains a purchase option.

The transaction is expected to close in May 2007, and will add sales to Couche-Tard's revenues and contribute to its earnings on an annualized basis. The acquisition is subject to standard regulatory approvals and closing conditions. Due to a confidentiality agreement, the purchase price was not disclosed. Internal available cash dollars will pay for the transaction.