After four acquisitions, Couche-Tard is sure it can digest big bites

After having announced and closed four sizable acquisitions this calendar year alone, in addition to smaller deals, Alimentation Couche-Tard Inc. now faces questions over how it will blend them all into its network.

"It's an awful lot to digest," RBC Dominion Securities analyst Irene Nattel said in an e-mailed question she submitted to the convenience store operator on Tuesday, noting that each of the transactions is in a different region. "[How can you] ensure that acquisitions get integrated effectively without losing momentum?"

Couche-Tard chief executive officer Brian Hannasch said it's an issue the company's management and board spent a lot of time talking about and planning for as the buying opportunities became available.

"In a controlled environment, these deals wouldn't be that close together," Mr. Hannasch said during a webcast to discuss the company's 2017 first-quarter earnings. "But that said, we take the opportunities when we think they're good value for our shareholders and we think we can handle them prudently."

He said the disparate geographies of the acquisitions are key because they allow different management teams and different shared service networks to work on the integration. And he noted that the company's decentralization – which lets local executives run their businesses without central interference while still benefiting from the larger company's scale – plays an important role in driving sales and profit after a transaction closes.

Couche-Tard, based in Laval, Que., is coming off perhaps its busiest-ever period for deal-making, striking agreements in the past 12 months for U.S.-based CST Brands Inc., Ireland's Topaz and certain Imperial Oil retail assets in Ontario and Quebec. It's also done several smaller deals. This week, it announced it is buying 53 stores held by American General Investments Inc. and North American Financial Group Inc. in Louisiana.

The deal-making has rapidly boosted its presence in Canada and the U.S. It will hold the No. 1 position in those countries when the CST deal closes, surpassing rival 7-Eleven Holdings in size.

Still, the company hasn't reached a size that would prevent it from growing further through M&A, Mr. Hannasch said.

He acknowledged that there are pockets in Quebec, Atlantic Canada and "a few small markets" in the U.S. where the company's share would make it difficult to do material acquisitions. But he said the U.S. overall remains a fragmented market.

In the context of the top 100 convenience store players in the United States, Couche-Tard holds a market share of less than 20 per cent in the country when all of its sites are added up, the CEO said.

Alimentation Couche-Tard

Close: $67.94, up 31¢