ALIMENTATION COUCHE-TARD AND CROSSAMERICA ANNOUNCE AGREEMENT FOR
SERIES OF ASSET EXCHANGES
ALIMENTATION COUCHE-TARD AND CROSSAMERICA
ANNOUNCE AGREEMENT FOR SERIES OF ASSET EXCHANGES
- 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
Laval,
Québec, Canada and Allentown, PA, United States, December 17,
2018 – 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
(www.crossamericapartners.com). To listen to the audio webcast, go
to
http://phx.corporate-ir.net/phoenix.zhtml?c=251390&p=irol-presentations.
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
http://phx.corporate-ir.net/phoenix.zhtml?c=251390&p=irol-presentations
within 24 hours after the call for a period of sixty days.
About Alimentation Couche-Tard Inc.
Couche-Tard is the leader in the Canadian
convenience store industry. In the United States, it is the largest
independent convenience store operator in terms of the number of
company-operated stores. In Europe, Couche-Tard is a leader in
convenience store and road transportation fuel retail in the
Scandinavian countries (Norway, Sweden and Denmark), in the Baltic
countries (Estonia, Latvia and Lithuania), as well as in Ireland
and also has an important presence in Poland. For more information
on Alimentation Couche-Tard Inc. or to consult its quarterly
Consolidated Financial Statements and Management Discussion and
Analysis, please visit: https://corpo.couche-tard.com.
About CrossAmerica Partners
LP
CrossAmerica Partners LP is a leading wholesale
distributor of motor fuels and owner and lessor of real estate used
in the retail distribution of motor fuels. Its general
partner, CrossAmerica GP LLC, is a wholly owned subsidiary of
Alimentation Couche-Tard Inc. Formed in 2012, CrossAmerica is
a distributor of branded and unbranded petroleum for motor vehicles
in the United States and distributes fuel to approximately 1,300
locations and owns or leases approximately 900 sites. With a
geographic footprint covering 31 states, the Partnership has
well-established relationships with several major oil brands,
including ExxonMobil, BP, Shell, Chevron, Sunoco, Valero, Gulf,
Citgo, Marathon and Phillips 66. CrossAmerica ranks as one of
ExxonMobil’s largest distributors by fuel volume in the United
States and in the top 10 for additional brands. For additional
information, please visit www.crossamericapartners.com.
Contacts:
Investor
Relations
Alimentation Couche-Tard Inc.: Mathieu
Descheneaux, Vice-President Finance, 450-662-6632, ext.
4619
CrossAmerica Partners LP: Randy Palmer,
Director – Investor Relations, 210-692-2160
Media Relations
Alimentation Couche-Tard Inc.: Marie-Noëlle
Cano, Senior Director – Global Communications,
450-662-6632, ext. 6611 or
communication@couche-tard.com
Cautionary Statement Regarding Forward-Looking
Statement
The statements set forth in this press release,
which describes Couche-Tard’s objectives, projections, estimates,
expectations or forecasts, may constitute forward-looking
statements within the meaning of securities legislation. Positive
or negative verbs such as "believe”, “can”, “shall”, “intend”,
“expect”, "estimate”, “assume” and other related expressions are
used to identify such statements. Couche-Tard would like to point
out that, by their very nature, forward-looking statements involve
risks and uncertainties such that its results, or the measures it
adopts, could differ materially from those indicated in or
underlying these statements, or could have an impact on the degree
of realization of a particular projection. Major factors that may
lead to a material difference between Couche-Tard’s actual results
and the projections or expectations set forth in the
forward-looking statements include the effects of the integration
of acquired businesses and the ability to achieve projected
synergies, fluctuations in margins on motor fuel sales, competition
in the convenience store and retail motor fuel industries, exchange
rate variations, and such other risks as described in detail from
time to time in the reports filed by Couche-Tard with securities
authorities in Canada and the United States. Unless otherwise
required by applicable securities laws, Couche-Tard disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. The forward-looking information in this release is
based on information available as of the date of the release.
Statements contained in this release that state
CrossAmerica’s or management’s expectations or predictions of the
future are forward-looking statements. The words “believe,”
“expect,” “should,” “intends,” “estimates,” “target” and other
similar expressions identify forward-looking statements. It is
important to note that actual results could differ materially from
those projected in such forward-looking statements. For more
information concerning factors that could cause actual results to
differ from those expressed or forecasted, see CrossAmerica’s
annual reports on Form 10-K, quarterly reports on Form 10-Q and
other reports filed with the Securities and Exchange Commission,
and available on CrossAmerica’s website at
www.crossamericapartners.com. CrossAmerica undertakes no obligation
to publicly update or revise any statements in this release,
whether as a result of new information, future events or
otherwise.
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