Alimentation Couche-Tard, the leader in the Canadian convenience store industry, has closed the acquisition of the assets of Hudson, Ohio-based Dairy Mart Convenience Stores.
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In a deal conducted through its US subsidiary Mac’s Convenience Stores, Laval, Quebec-based Couche-Tard paid US$79.5m for 287 Dairy Mart stores, a figure that includes US$13.5m for the inventories of these stores.
This transaction is matched with a one-year management contract for the network’s remaining 150 stores, some of which could be acquired by Mac’s during the next few months, while others could be closed or sold on behalf of Dairy Mart. In accordance with the agreement, an additional US$4.4m will be paid for the inventories of the stores under the management contract. The entire amount of the transaction is financed by bank loans. With this acquisition, Couche-Tard now has 545 stores in the Midwestern US.
This transaction will add about C$700m (US$447.4m) to Couche-Tard’s annual sales and could contribute C$0.02 to its earnings per share (EPS) for the eight months of operation ending 30 April 2003. For the following fiscal year, ending 30 April 2004, Dairy Mart is expected to yield a contribution of C$0.08 to Couche-Tard’s EPS.
A leading regional convenience retailing chain, Dairy Mart is present in five Midwestern and Southeastern states. Mac’s Convenience Stores will operate the Midwest networks under the Bigfoot, Handy Andy and Dairy Mart banners. Moreover, several dozen Bigfoot stores have been converted to the Mac’s banner in recent months, and others will showcase this new banner once they are converted to the Store 2000 concept.
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By GlobalData“We will thus complete our first growth platform in the US Midwest and are very pleased to have closed this transaction within a reasonable time frame. We are proud to gain a solid team and highly confident we can successfully integrate this network. Our integration plan provides for the transfer of accounting and information technologies over the next six months, offering training programmes to employees, installing optical scanners and converting about 15 stores to the Store 2000 concept as developed in the US,” said Alain Bouchard, chairman, president and CEO of Couche-Tard.
