CrossAmerica Partners & Couche-Tard Complete Final Asset Exchange
ALLENTOWN, Pa. — CrossAmerica Partners LP and Alimentation Couche-Tard Inc. wrapped up their formerly announced asset exchange in the third quarter of 2020.
According to CrossAmerica President and CEO Charles Nifong, the two companies completed the sixth and final asset exchange on Sept. 15. Under this final piece of the transaction, CrossAmerica received 23 properties, while Couche-Tard's Circle K network received the real property for four sites, Nifong reported during CrossAmerica's third-quarter earnings call held Nov. 5. CrossAmerica also received a cash payment of $6.7 million in connection with the closing.
"With the six total asset exchanges, CrossAmerica received 191 properties and Circle K received the real property for 56 U.S. convenience and retail fuel stores, along with 17 company-operated convenience sites in the Upper Midwest," Nifong detailed.
The two companies entered into the asset exchange agreement in December 2018. At the time, CrossAmerica's general partner, CrossAmerica GP LLC, was a wholly owned subsidiary of Couche-Tard, as Convenience Store News previously reported.
In November 2019, Laval, Quebec-based Couche-Tard sold its ownership interest in CrossAmerica to investment entities controlled by Joe Topper, the founder of the Allentown-based company; however, the move did not affect the asset exchange pact between the companies.
During the third quarter, CrossAmerica also sold seven properties for a total of $3.8 million as part of its real estate optimization plan. Overall during the first three quarters of 2020 — covering the nine months ended Sept. 30 — the company sold 20 properties for a total of $13.3 million.
"We continue to have an active pipeline of properties to divest, and the real estate team has not let COVID stop their progress on this important initiative," Nifong said.
CrossAmerica reported third-quarter operating income of $23.7 million and net income of $21.2 million, compared to operating income of $12.3 million and net income of $7.2 million for the same period in 2019.
The company generated third-quarter adjusted EBITA of $30 million and distributable cash flow of $29.7 million, compared to $29 million and $25.7 million, respectively, in the third quarter of last year.
In its wholesale segment, CrossAmerica reported $42.8 million in gross profit vs. $36.2 million in Q3 2019. In its retail segment, the company reported $19.5 million in gross profit vs. $4.9 million in the comparable year-ago period.
Formed in 2012, CrossAmerica Partners LP is a distributor of branded and unbranded motor fuel in the United States and distributes fuel to approximately 1,700 locations and owns or leases approximately 1,100 sites. Its geographic footprint covers 34 states.