- Alimentation Couche-Tard Inc. ("Couche-Tard") has transferred
to CrossAmerica 60 U.S. company-operated convenience and fuel
retail stores (the "Circle K stores")
- CrossAmerica has transferred to Couche-Tard 17 company-operated
convenience and fuel retail stores in the U.S. Upper Midwest
currently operated by CrossAmerica and the real property for eight
U.S. company-operated convenience and fuel retail stores currently
leased and operated by Couche-Tard
- This is the first exchange of assets in a series of
transactions announced by Couche-Tard and CrossAmerica in
December 2018
- Each transaction is anticipated to be accretive to
CrossAmerica's distributable cash flow
LAVAL, QC and ALLENTOWN, PA, May 22,
2019 /PRNewswire/ - Alimentation Couche-Tard Inc.
("Couche-Tard") (TSX: ATD.A) (TSX: ATD.B), through Circle K Stores
Inc., its wholly-owned subsidiary ("Circle K"), and CrossAmerica
Partners LP (NYSE: CAPL) ("CrossAmerica" or the "Partnership")
today announced an exchange of assets that is the first in a series
of transactions under an Asset Exchange Agreement executed in
December 2018.
In December 2018, Couche-Tard
announced that it agreed to transfer 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 in exchange for assets having an
aggregate value of approximately US$184.5
million. These assets include the real 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 operated by
CrossAmerica located in the U.S. Upper Midwest (the "Upper Midwest
properties").
In this first transaction, Couche-Tard transferred to
CrossAmerica 60 (52 fee and 8 leased) U.S. company-operated
convenience and fuel retail stores having an aggregate value of
approximately US$58.1 million. In
exchange, CrossAmerica transferred to Couche-Tard assets having an
aggregate value of approximately US$58.3
million. These CrossAmerica assets include all 17 of the
Upper Midwest properties and the real property for eight master
lease properties.
Prior to the exchange, Couche-Tard executed dealer agreements
for the Circle K stores transferred to CrossAmerica, including
leases and fuel supply agreements, with independent dealers who
will lease and operate the stores after the exchange. These
agreements were assigned to CrossAmerica as part of the exchange.
In addition, Couche-Tard and CrossAmerica entered into a Sub-Jobber
Agreement pursuant to which Couche-Tard will supply fuel to
CrossAmerica for resale to the dealers at those 60 stores after the
exchange. The terms of the Sub-Jobber Agreement were
unanimously approved by the independent Conflicts Committee of the
board of the Partnership's general partner in December 2018 at the time when the terms of the
Asset Exchange Agreement were approved. The existing fuel supply
arrangements for the eight master lease properties will remain
unchanged.
Previous expectations were that the exchange of assets would
occur in a series of transactions over a period of up to 24 months.
However, it is now anticipated that the remaining exchange of
assets will be completed in a series of transactions by no later
than the end of the first quarter of calendar year 2020. The
closing of each asset exchange transaction is subject to closing
conditions set forth in the Asset Exchange Agreement. It continues
to be 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.
CrossAmerica will be filing a Form 8-K with the Securities and
Exchange Commission providing additional details of the
exchange.
Gerardo Valencia, CEO and
President of CrossAmerica, stated, "We are very pleased with the
process we have established to make this a smooth and fast
transition. We have identified very strong operators to maximize
the potential of the sites we are taking over from Circle K and
have a strong pipeline for the remaining 132 sites."
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 over
1,200 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.
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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SOURCE Alimentation Couche-Tard Inc.