Couche-Tard & Topaz Share Same DNA
DUBLIN — Circle K is coming to Ireland via the Topaz stores and both sides of the acquisition see the combination as a perfect fit.
"We're very excited. We've been looking at Ireland for six years, since 2009, and we couldn’t be more happy to be coming to Ireland and joining the Topaz network," said Brian Hannasch, president and CEO of Circle K parent Alimentation Couche-Tard Inc. "We think it is the premier operator in the country and we know a lot about that — acquiring great companies, great management teams that are winning and investing in their stores and winning with the customers. We are here to help further that journey."
Hannasch's remarks came during a conference call held shortly after the Laval, Quebec-based convenience store retailer announced it was acquiring Topaz. The deal calls for Couche-Tard to purchase the majority share capital — more than 99.86 percent — of both Topaz Energy Group Limited and Resource Property Investment Fund plc, together with the entire share capital of Esso Ireland Limited, as CSNews Online previously reported.
No price tag was attached to the transaction, which is expected to close in late February or early March.
Dublin-based Topaz has 464 stations across Ireland, including its recently acquired Esso station network. Of these stations, 162 are owned by Topaz and 302 are owned by dealers. The agreement with Couche-Tard also encompasses a commercial fuels operation with more than 30 depots and two owned terminals.
According to Emmet O'Neill, chief executive of Topaz, the company has been undergoing a transformation the past two years, but is now positioned as the leading convenience retailer in the country.
"The last two years have been a period of transformation. We moved from an organization that was challenged and weak and with an uncertain future to the No. 1 operator in the country, extremely well invested, well branded and well respected," O'Neill said. "We are now joining the world's No. 1 fuel retail convenience operator, which is also well branded, well invested and strong. It's a great marriage."
Couche-Tard's move into Ireland comes three years after it entered Europe through its acquisition of Statoil Fuel & Retail ASA, which has a presence in eight countries. According to Hannasch, Statoil has a very large presence in Scandinavia, with the No. 1 market share in Denmark, Norway and Sweden. It also has a presence in the three Baltic countries, Poland and Russia.
"It's been a great marriage. Three and half years later, we continue to be impressed with our team in Europe. We've done a lot of sharing of best practices, back and forth, and we've learned from each other. Today, I think we've got that platform ready to grow and certainly this is a big first step in growing across Europe," he explained.
Couche-Tard began with one store in Quebec in 1980. As of Oct. 11 of this year, its network comprised approximately 8,006 convenience stores throughout North America and 2,217 stores throughout Europe.
Earlier this year, it closed on an acquisition of The Pantry Inc., a Cary, N.C.-based convenience store chain with approximately 1,500 stores.
"We certainly believe we are more than an acquisition story. We focus on what we do, which is convenience and fuel. We have 100,000 employees so it is a lot about people doing the right things every day with the customer. We focus on reinvesting in the stores, reinvesting in the people, and we think there is a great opportunity to continue the journey that Emmitt has started here with Topaz the last couple of years," Hannasch said.
Circle K's Global Journey
Roughly two months ago, Couche-Tard announced it would be transitioning its Circle K brand into the face of the company globally, with the exception of Quebec. This will hold true for the Topaz assets as well.
"We're on a journey as a company to become the world's preferred destination for convenience and fuel. That doesn't mean big to us. That means truly preferred and when we looked at what Topaz is doing here in Ireland -- not only when they launched the Topaz brand a number of years ago — they are on a journey to become preferred with the Irish consumer," Hannasch said.
"Introducing food, healthier products, differentiated products for the consumers in Ireland. We share a very similar dream to differentiate our products, make the visit easy and provide great customer service," he continued. "We think we share some of the same DNA on our journey to becoming the preferred brand."
Once the transaction closes, Couche-Tard will look to a local management team to help with the transition. O'Neill will be leaving the company upon completion of the deal.
"We recognize the Irish consumer is different from the consumer in Indiana, where I am from originally, or Quebec or Oslo," Hannasch explained. "We learn, we adapt locally. We use local management. There will not be a team of North Americans or Scandinavians coming here. It's very much about an Irish team, an Irish consumer. It's about sharing what we do well, learning what Topaz does well, and making a better company of it. Our mission is to act as locally as we can."
While Circle K will become the brand in Ireland, Couche-Tard is still deciding on the fuel brand.
"We've got a large dealer network of very independent operators running stores; that's very important to us. So, we have to work out with local management what's right from a fueling standpoint in Ireland," the chief executive said. "From an Esso brand standpoint, I think we have the right to use that brand for some period of time, so that's limited as well. We will take that into consideration in the strategy."
At this time, no decision has been made on future growth in Ireland. Couche-Tard executives met with the local team in Ireland earlier this week and they will spend the next month prioritizing their actions and where to go from here.
"We are here to grow," Hannasch said. "We are here to even further improve the offering for the people of Ireland. What specifically that means for the store count is very much a local management decision, along with the capital we bring to the table."
Hannasch was not prepared to put a number on the synergies related to the transaction, but he noted that he is "very optimistic that there are synergies on the cost side, supply chain, fuel side and, most importantly, on the intellectual side — sharing the best practices and ideas from our other countries and other experiences here and vice versa. That's where the real prize is."