Kocolene Sells Its Fast Max C-stores to Couche-Tard

SEYMOUR, Ind. — Alimentation Couche-Tard Inc. is adding more than a dozen convenience stores in the Midwest.

Kocolene Marketing LLC is selling its Fast Max Convenience Stores to the Canada-based retailer's Mac's Convenience Stores LLC. The deal includes 13 company-operated convenience stores with motor fuel offerings in Indiana and Kentucky, as well as the underlying real estate at 12 of the locations, according to Matrix Capital Markets Group Inc.

The c-stores will be under the Circle K banner.

Seymour-based Kocolene Marketing is a fuels distribution, petroleum marketing and convenience store company with operations in Indiana and Kentucky. 

After the sale, the company will continue to operate a wholesale motor fuels distribution business, five company-operated retail fuel outlets and 15 Smoker's Host retail tobacco stores, according to the company.

"Players in the convenience store industry are getting bigger, more sophisticated and have a lot of capital," CEO Gary F. Myers said.  "Late last year, our board of directors asked that we perform a S.W.O.T. (Strengths, Weaknesses, Opportunities, Threats) analysis on all of our business divisions." 

The company is a wholly owned subsidiary of Kocolene Development Corp. Kocolene also owns controlling interests in Ranger Enterprises LLC, a warehousing, logistics, and recycling business; and Komack Environmental LLC, an environmental remediation services company. 

"The Ranger and Smokers Host models came back with favorable S.W.O.T. analysis results, but the Fast Max model did not," Myers said.  "Our convenience stores have very good real estate locations, but the overall facilities are in need of capital infusion in the near future. 

"Government mandates for healthcare, higher wages and data security will all be very expensive. Circle K has the capital and successful programs in place at their other stores which they could implement in ours.  It's a great fit for them, and for our people," he added.

Kocolene Development Corp. was founded in 1938 by Carrie Myers, the executive's grandmother.  Several family members have lead the organization through decades of success in the fuel business. 

"Although we've always been in the fuel business, my late father once said to me, 'There's a time to buy and a time to sell.  Some day you might feel that it's the right time to sell this oil company and it is better to sell two weeks too soon rather than one day too late. You have to know when that time arrives and don't let the ghosts of your grandmother and I stop you if you feel it's the right decision," he explained.    

The leadership team at Kocolene felt the timing was right since the division had experienced increases in sales and profits over the past several years. 

"We engaged the services of a leading industry intermediary and early this year the stores were put out for bid, Myers said. "We're 100-percent employee owned and we were 100-percent transparent with our team members." 

Any team members who were victims of the decrease in store count were either offered a like position or a fair severance package.  Kocolene also funded the use of a staffing company to help with resume building and job placement. 

The company plans to grow the Smokers Host Discount Tobacco and Ranger divisions and is "actively searching for another business model to acquire outside of retail," Meyers added.

Matrix provided merger and acquisition advisory services to Kocolene, which included valuation advisory, marketing of the company and negotiation of the transaction. The transaction was co-managed by Cedric Fortemps, managing director and Vance Saunders, director. 

Tom Kelso, managing director and head of Matrix's Downstream Energy & Retail Group, Stephen Lynch, senior associate, and Kyle Profilet, analyst, also advised on the transaction. 

John Millspaugh, James Moloy, Andrew Harwell, and Angela Stephens Tarter of Bose McKinney & Evans LLP served as legal counsel for Kocolene.