Alimentation Couche-Tard and CrossAmerica Announce Agreement for Series of Asset Exchanges

Source Press Release
Company Alimentation Couche-Tard IncCrossAmerica Partners LP 
Tags Asset Deals, Deals, Refining & Marketing Activities
Date December 17, 2018
  • Alimentation Couche-Tard has agreed to sell to CrossAmerica 192 U.S. company-operated convenience and fuel retail stores (the “Circle K stores”)
  • CrossAmerica has agreed to sell to Couche-Tard the real estate property for 56 U.S. company-operated convenience and fuel retail stores currently leased and operated by Couche-Tard and 17 company-operated convenience and fuel retail stores in the U.S. Upper Midwest currently operated by CrossAmerica
  • Assets will be exchanged in a series of transactions, as dealers are secured to operate the Circle K stores for CrossAmerica
  • The first transaction is expected to occur in the first half of calendar year 2019
  • Transactions expected to be accretive to CrossAmerica’s distributable cash flow to limited partners

Alimentation Couche-Tard Inc. (“Couche-Tard”) (TSX: ATD.A) (TSX:ATD.B), through Circle K Stores Inc., its wholly-owned subsidiary, and CrossAmerica Partners LP (NYSE: CAPL) (“CrossAmerica” or the “Partnership”) today announced an agreement to exchange assets in a series of transactions.  

Couche-Tard has agreed to sell to CrossAmerica 192 (162 fee and 30 leased) U.S. company-operated convenience and fuel retail stores having an aggregate value of approximately US$184.5 million. CrossAmerica has agreed to sell to Couche-Tard assets having an aggregate value of approximately US$184.5 million. These CrossAmerica assets include the real estate property for 56 U.S. company-operated convenience and fuel retail stores currently leased and operated by Couche-Tard pursuant to a master lease that CrossAmerica previously purchased jointly with or from CST Brands Inc. (the “master lease properties”), and 17 company-operated convenience and fuel retail stores currently owned and operated by CrossAmerica located in the U.S. Upper Midwest. The existing fuel supply arrangements for the 56 master lease properties will remain unchanged. 

It is expected that the exchange of assets will occur in a series of transactions over a period of up to 24 months. The Circle K retail stores to be sold to CrossAmerica will remain at Couche-Tard until dealers are secured to operate the sites. The process is already underway to identify qualified dealers, and the first transaction is anticipated to occur in the first half of calendar year 2019. It is expected that there will be no additional funding required as part of these transactions. CrossAmerica also expects these transactions will be accretive to distributable cash flow to its limited partners.

The asset exchange agreement was approved by the CrossAmerica board of directors following the approval of the terms of the transaction by its independent Conflicts Committee. The Conflicts Committee was advised by Evercore as its independent financial advisor and by Richards, Layton & Finger, P.A. as its independent legal counsel. Couche-Tard was advised by Faegre Baker Daniels LLP. The closing of each asset exchange transaction is subject to customary closing conditions.

Gerardo Valencia, CEO and President of CrossAmerica, stated, "We are very excited about this first asset exchange with Couche-Tard and the substantial benefits it provides to the partnership. This transaction provides further diversity to our wholesale network, an important step in our goal of simplifying the business and cash flow streams.”  Valencia added, “As partners, we took the necessary time to secure a plan that will allow for an easy transition of these sites from Couche-Tard to CrossAmerica and add value for all stakeholders.”

Brian Hannasch, President and CEO of Couche-Tard, said, “We believe this transaction will be beneficial to both parties. The transfer of Couche-Tard’s retail stores to CrossAmerica will help optimize the long-term value of these assets, further strengthens Couche-Tard’s core retail business and is a win-win for both sets of stakeholders.”

Conference Call

CrossAmerica will host a conference call on December 17, 2018 at 9:00 A.M.(EST) to discuss the asset exchange. The conference call numbers are 1-877-615-4335 or 1-847-944-7271 and the access code for both is 5583962#. A live audio webcast of the conference call and slide presentation will be available on that same day on the investor section of the CrossAmerica website (). To listen to the audio webcast, go to . After the live conference call, a replay will be available for a period of thirty days. The replay numbers are 1-888-843-7419 or 1-630-652-3042 and the access code for both is 5583962#. An archive of the webcast will be available on the investor section of the CrossAmerica website at  within 24 hours after the call for a period of sixty days.

Source: EvaluateEnergy® ©2019 EvaluateEnergy Ltd