Just one day after completing its biggest ever U.S. acquisition, convenience-store giant Alimentation Couche-Tard Inc. is boosting its presence in Northern Europe with a deal to buy Royal Dutch Shell PLC's retail and other businesses in Denmark.
The latest transaction for Couche-Tard of Laval, Que., will give it 315 retail outlets in Denmark as well as a commercial fuels operation and an aviation business working out of seven Danish airports.
The value of the deal – which gives Couche-Tard the rights to the Shell trademark in Denmark for 10 years – was not disclosed, but Desjardins Securities analyst Keith Howlett estimated in a note Tuesday it is between $500-million (U.S.) and $600-million.
The acquisition, expected to be completed in the second half of Couche-Tard's 2016 financial year, will almost double its presence in Denmark. It is the first major asset purchase for Couche-Tard since the 2012 acquisition of Norwegian oil giant Statoil ASA's retail operations for about $2.8-billion.
Couche-Tard is expected to continue buying up assets in Europe as the big integrated oil companies move to sell their retail operations on the continent.
In 2012, Couche-Tard said it would use the Statoil acquisition as "our platform for growth in Europe," president and chief executive Brian Hannasch said in a news release Tuesday.
"We are now pleased to take this next step forward in the European market."
"Couche-Tard has ample financial capacity to conclude additional significant transactions," Desjardins' Mr. Howlett said.
Couche-Tard's European network stretches across Norway, Sweden, Denmark, Poland, the Baltics and Russia, with 2,239 stores as of Oct. 12, 2014.
In the United States, Couche-Tard has closed a $1.7-billion deal (including debt) to buy the 1,500 stores in 13 states operated by Cary, N.C.-based chain The Pantry Inc. North American operations consist of 6,303 outlets in 40 states and the 10 provinces.
Also Tuesday, Canada's biggest operator of convenience stores and fuel stations posted third-quarter net earnings of $248.1-million or 44 cents a share, compared with $182.3-million or 32 cents in the year-earlier period.
Excluding non-recurring items, net profit in the quarter was $289-million or 51 cents, compared with $175-million or 31 cents last year.
Total revenue was $9.1-billion, down from $11.1-billion in the year-earlier period, largely due to lower fuel prices and exchange-rate fluctuations.
Under co-founder Alain Bouchard, Couche-Tard has grown into one of the top convenience store players in the world. He has stated in the past that he would like to see the company's store count of 13,100 outlets top 25,000 by 2023.
Mr. Bouchard handed over the CEO job to chief operating officer Mr. Hannasch last year. The Iowa-born Mr. Hannasch is credited with spearheading Couche-Tard's U.S. expansion.
Mr. Bouchard is now executive chairman and said he planned to focus mostly on identifying acquisition targets and evaluating new industry opportunities.
By the numbers
315 Number of sites in Shell's Danish retail business, 225 of which are full-service stations, 75 are automated fuel stations and 15 are truck stops. Couche-Tard has signed a deal to acquire the retail, commercial fuels and aviation businesses in Denmark owned by Dansk Shell.
2,233 Number of retail outlets in Couche-Tard's European network, which includes Norway, Sweden, Denmark, Poland, Estonia, Latvia, Lithuania and Russia. Couche-Tard also operates fuel terminals and fuel depots in Europe. Including employees at Statoil-branded franchise stations, about 17,500 people work in its retail network, terminals and service offices across Europe.
6,314 Number of North American locations in Couche-Tard's network of convenience stores, which covers 10 provinces and 40 states, and employs more than 60,000 people.
4,600 Number of independent stores operated under Couche-Tard's Circle K banner in 12 countries worldwide: China, Guam, Honduras, Hong Kong, Indonesia, Japan, Macau, Malaysia, Mexico, the Philippines, the United Arab Emirates and Vietnam.
Source: Alimentation Couche-Tard Inc. Data as of Feb. 1, 2015