ALIMENTATION COUCHE-TARD AND CROSSAMERICA
ANNOUNCE THE CLOSING OF THE FIRST TRANCHE IN A SERIES OF ASSET
EXCHANGES
- 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,
Québec, Canada and Allentown, PA, United States, May 22,
2019 – 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.
Contacts:
Investor
Relations
Alimentation Couche-Tard Inc.: Jean-Marc Ayas,
Manager, Investor Relations, 450-662-6632, ext. 4619
CrossAmerica Partners LP: Randy Palmer,
Director, Investor Relations, 210-742-8316
Media Relations
Alimentation Couche-Tard Inc.: Lisa Koenig,
Communications Director, Global Communications, 210-692-2659 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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