LAVAL, Quebec, and SAN ANTONIO — Alimentation Couche-Tard Inc. has announced a definitive merger agreement with CST Brands Inc. under which Couche-Tard would acquire CST in an all-cash transaction for $48.53 per share, with a total enterprise value of approximately $4.4 billion (U.S.) including net debt assumed.
The terms and conditions of the agreement were unanimously approved by the boards of directors of both companies.
The transaction price represents a premium of 42% to CST’s closing share price on March 3, 2016, the last trading day prior to CST announcing that it would explore and review its strategic alternatives to further enhance its stockholder value.
This all-cash transaction is expected to be financed by Couche-Tard’s available cash, existing credit facilities and a new term loan. The CST transaction is expected to close in early calendar year 2017 and is subject to the approval of CST’s stockholders and regulatory approvals in the United States and Canada.
Couche-Tard has also entered into an agreement with Parkland Fuel Corp. pursuant to which it would sell certain Canadian assets of CST after the merger for approximately $750 million (U.S). The assets in Canada that would be sold include CST’s Cardlock business, CST’s Dealer and Commission Agents business, CST’s commercial and home energy business, a number of company-operated stores to be determined following the Competition Bureau of Canada’s review of the transaction and CST’s Montréal corporate head office.
This transaction is subject to customary regulatory approval and closing conditions. Couche-Tard intends to use the proceeds from this sale to repay part of its credit facilities.
CST is based in San Antonio and has more than 2,000 locations throughout the Southwest United States with a presence in Texas, in Georgia, in the U.S. Southeast, in New York and eastern Canada.
CST also controls the general partner of Allentown, Pa.-based CrossAmerica Partners LP, owns 100% of its Incentive Distribution Rights and holds a significant equity investment in it. CrossAmerica distributes branded and unbranded road transportation fuel to more than 1,100 locations in the United States.
As of April 24, 2016, Laval, Quebec-based Couche-Tard’s network comprised 7,888 convenience stores throughout North America, including 6,490 stores with road transportation fuel dispensing. Its North American network consists of 15 business units, including 11 in the United States covering 41 states and 4 in Canada covering all 10 provinces.
In Europe, Couche-Tard operates a broad retail network across Scandinavia, Ireland, Poland, the Baltics States and Russia. In addition, under licensing agreements, almost 1,500 stores are operated under the Circle K banner in 13 other countries and territories worldwide (China, Costa Rica, Egypt, Guam, Honduras, Hong Kong, Indonesia, Macau, Malaysia, Mexico, the Philippines, the United Arab Emirates and Vietnam), which brings the total network to more than 12,000 stores.
Watch for details in CSP Daily News.