Alimentation Couche-Tard is continuing its acquisition run in the United States as the Canadian retailer signed an agreement with Holiday Cos. to acquire all the issued and outstanding shares of Holiday Stations Inc. and certain affiliated companies.
The Midwest-based Holiday's assets include more than 500 company-operated and franchise convenience stores, a food commissary and a fuel terminal.
Holiday is a privately owned company based in Minnesota and was founded by the Erickson family in 1928.
Of its 522 c-stores, 374 are company-operated and 148 are franchises. It has locations in 10 states: Minnesota, Wisconsin, Washington, Idaho, Montana, Wyoming, North Dakota, South Dakota, Michigan and Alaska.
Holiday's retail sites sell fuel under the Holiday brand and the company operates 221 car washes.
"The acquisition of Holiday is a great fit for Couche-Tard and will allow us to continue to build on our geographical growth strategy. The Erickson family and its management team have created one of the strongest, well run companies in the northern tier region of the U.S. with a great brand and consumer offer. We are pleased to welcome the Holiday brand and its highly successful programs to the family," said Brian Hannasch, president and CEO of Couche-Tard.
The transaction is anticipated to close in the fourth quarter of Couche-Tard's fiscal year 2018 and is subject to customary regulatory approvals and closing conditions. Both companies have agreed not disclose the purchase price at this time.
"We believe there are tremendous synergies between the two companies and that it also gives us a great entry point into the Upper Midwest and in particular a strong position in the Greater Twin Cities metropolitan area, with a population of 3.5 million," Hannasch said.
The acquired business is expected to generate EBITDA earnings ranging between $180 million and $190 million on an annual basis, before synergies. Couche-Tard expects to finance the transaction by using its available cash and existing credit facilities.
"This acquisition, and the added value it will bring to our existing network of 14,000 stores, confirms our capacity to continue to grow by acquisition all the while targeting continued organic growth through food sales and other key categories," Hannasch added.
Couche-Tard intends to continue Holiday's operational base at the Holiday corporate headquarters in Bloomington, Minn.
"We are pleased to entrust Couche-Tard with carrying forward the Holiday brand and our highly successful programs. Our 90-year history and our promising future are being placed into excellent hands," said Ronald Erickson, chairman and CEO of Holiday Stationstores.
Cleary Gottlieb Steen & Hamilton LLP represented Couche-Tard in the transaction. J.P. Morgan Securities LLC acted as exclusive financial advisor to Holiday and Faegre Baker Daniels LLP acted as legal advisor to Holiday.
The Holiday transaction is Couche-Tard's latest move in the U.S., coming two weeks after closing its acquisition of San Antonio-based CST Brands Inc., parent of the Corner Stores c-store chain, as CSNews Online previously reported.
As of Jan. 29, adjusted to include the acquisition of CST, Laval-based Couche-Tard's network comprised of close to 9,500 convenience stores throughout North America, including 7,567 stores with road transportation fuel dispensing. Its North American network consists of 16 business units, including 12 in the United States covering 42 states and 4 in Canada covering all 10 provinces.