Finding the Right Fit

Stéphane Trudel has only been in his position as senior vice president of mergers and acquisitions (M&A) at CST Brands since last year, but he and the rest of his team have already found great success, thanks in part to their firsthand knowledge of business integration.

CST spun off from its Valero parent company in May 2013 and in October 2014, acquired Lehigh Gas Partners LP, which became CrossAmerica Partners LP Now, CST and CrossAmerica have formed not only a partnership, but also an M&A team of four members based in Montréal, Allentown and San Antonio.

Centered in Montréal, Trudel leads the team, which has completed several deals since the CST/CrossAmerica partnership was formed: the acquisition of Nice N Easy in New York, Timewise in San Antonio, Erickson Oil in Minnesota, and One Stop in West Virginia.

A PERFECT PARTNERSHIP

“Once a week, I meet with the leadership team of CrossAmerica and CST and we go through the highlights of the week in M&A. This allows me to get a good feel for where people stand on each deal we’re working on,” said Trudel.

“Lehigh Gas had a great reputation as an acquirer and CST has a great reputation as an operator, and marrying the two is unique, I think,” he added. “Being able to tell a seller what we’re going to do, and being able to keep to our word all through the process and execute what we’re trying to do is key.”

Trudel said all acquisitions will be made through the joint lenses of CST and CrossAmerica going forward, because while there are two different companies, there’s only one M&A team.

Growth is a top priority at CST, whether through increasing in-store sales, building new-to-industry sites or through acquisitions, with a goal of $150 million–$200 million of acquisitions a year. Trudel’s team frequently works with accounting, environmental, legal, operations and human resources, and CST even has a dedicated integration and development operations team to ensure the integration process goes as smoothly as possible.

When he’s not in the Tuesday morning meeting, Trudel said he and the rest of his team spend most of their time on the phone talking to sellers and getting data, and evaluating businesses and their financial models.

IT ALL COMES DOWN TO TRUST

Trudel graduated with a degree in management information systems and started his tenure at CST in the IT department. He learned a lot about the inner workings of the business from this position. When he realized a move from IT was required to contribute to the company’s growth, he moved into the heating oil business, and then on to the construction/real estate group.

This strong business acumen helps Trudel better understand the dynamics of potential sellers. He knows it’s not just about money to a lot of owners, who typically run family convenience businesses and want to see their core values maintained throughout the process.

“We have a lot of respect for sellers, and we have a lot of respect for what they’ve built, and we want to ensure we don’t destroy that. We try to understand what makes that group special and make sure we maintain that,” he said.

“When you reach that point where you feel it’s a win-win, to me that’s the most rewarding part. And finding a company that adds something to CST is also rewarding,” he continued.

THE IDEAL ACQUISITION

There’s no shortage of acquisition opportunities in the North American c-store/petroleum market, so how does Trudel’s team hone in on the right deals?

“We’re looking for as much synergy as we can with our existing business,” he explained. “We’re looking at expanding our geography with companies that lead in their location. We’re really looking anywhere in North America.”

With such a strong growth strategy in place at CST, Trudel’s M&A team plays a very integral role to the future success of the company.

“I think what acquisitions gets us is exposure; not only will it grow our bottom line and bring us talent, but it also opens new markets for us. We won’t necessarily go into a market and start from scratch,” he said. “Everything works together, we’re not in our own silo. When we look at networks, we always evaluate the potential of eventually building stores in that market.”

CST IS THE PLACE TO BE

Trudel said he couldn’t be happier to be part of CST during this growth period, especially when it means only positive things for the Canadian side of the business.

“You feel you can contribute to the growth of the company, you feel there will be growth, and there are signs of this growth. This is the beginning of something big,” he said.

“Canada is 40 percent of the bottom line of this new company. We used to be a smaller part of a large company, and Canadian retail was so small. Now to be able to lead M&A for the whole company, to me that’s an incredible opportunity.”