The asset exchange is expected to occur in a series of transactions over a period of up to 24 months.
Alimentation Couche-Tard and CrossAmerica have agreed to exchange assets in a series of transactions.
Alimentation Couche-Tard is divesting 192 (162 fee and 30 leased) company-operated convenience and fuel retail stores (the Circle K stores) to CrossAmerica. The stores have 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.
The assets will be exchanged in a series of transactions, as dealers are secured to operate the Circle K stores for CrossAmerica. 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. 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.
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.”
“We believe this transaction will be beneficial to both parties,” said Brian Hannasch, president and CEO of Couche-Tard. “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.”