Couche-Tard aims for top convenience store spot with Pantry buy
By Devika Krishna Kumar
(Reuters) - Canada's Alimentation Couche-Tard Inc ATDb.TO will buy smaller U.S. rival Pantry Inc PTRY.O for about $861 million, a deal that positions it as one of the top convenience store operators in North America.
The deal will add about 1,500 stores to Couche-Tard's network, boosting its presence in the southeastern and Gulf Coast regions of the United States and making it almost as big as 7-Eleven, the world's largest convenience store operator.
Couche-Tard's aggressive growth strategy was not surprising, given that the company made an unsuccessful hostile bid for Casey's General Stores Inc CASY.O in 2010, said Jeff Lenard, spokesman for the National Association of Convenience Stores.
The Canadian company bought Statoil Fuel and Retail in 2012 to gain a foothold in Europe.
Couche-Tard, which operates most of its U.S. stores under the Circle K banner, has over 6,300 outlets in North America. 7-Eleven operates and franchises about 8,700 stores in the region.
This is the latest in a series of deals in the North American gas retail industry, the most recent being Marathon Petroleum Corp's (MPC.N: Quote) purchase of Hess Corp's HES.N retail and transport business in October.
"We expect industry consolidation to continue to be a key theme in the (convenience store) space," Wells Fargo analyst Bonnie Herzog said.
Herzog said Pantry was an attractive target due to its "much improved results over the past several quarters." Continued...