Couche-Tard is expected to complete its acquisition of CST Brands by early 2017.
The Board of Directors for CST Brands Inc. has unanimously decided to enter into a definitive merger agreement with Alimentation Couche-Tard Inc. Under this new agreement, Couche-Tard will acquire all shares of CST for $48.53 per share in cash. The total transaction will amount to a total enterprise value of approximately $4.4 billion, which includes the assumption of net debt. Both companies’ Boards of Directors unanimously approved the terms and conditions of the agreement.
The transaction value represents a premium of approximately 42% to CST’s closing stock price on March 3, 2016, the last date prior to CST announcing that its Board commenced an exploration of strategic alternatives to further enhance stockholder value.
This all-cash transaction, which is expected to close in early 2017, will be financed with Couche-Tard’s available cash, existing credit facilities and a new term loan. The agreement is still subject to the approval of CST’s stockholders, along with regulatory approvals in the U.S. and Canada.
In addition to the CST merger agreement, Couche-Tard has also entered into an agreement with Parkland Fuel Corp. stating that Couche-Tard will sell certain Canadian assets of CST, including CST’s Cardlock business, CST’s Dealer and Commission Agents Business, CST’s Commercial and Home Energy Business, numerous company operated stores and CST’s Montréal corporate head office, following the merger, for approximately $750 million. The proceeds of this sale will be used to repay some of Couche-Tard’s credit facilities.
Also following the completion of the transaction, Couche-Tard will establish a new Circle K business unit in San Antonio with attached shared services operations.
Company Financial Advisors
CST has reported that BofA Merrill Lynch is serving as the company’s lead financial advisor, along with J.P. Morgan Chase. Wachtell, Lipton, Rosen & Katz and Stikeman Elliott are acting as CST’s legal advisors.
Couche-Tard has reported that Faegre Baker Daniels LLP and Davies Ward Phillips & Vineberg are acting as legal advisors to the company. Morgan Stanley & Co. LLC and National Bank Financial were financial advisors for the transaction.
