The purchase of more than 500 Holiday Stationstores allows Couche-Tard to build on its geographical growth strategy, moving the company into six new states.
Alimentation Couche-Tard Inc. is acquiring Holiday Stationstores Inc. (Holiday).
Holiday is a convenience store player in the Upper Midwestern U.S., whose assets include over 500 company operated and franchise locations, a food commissary and a fuel terminal. This acquisition allows Couche-Tard to continue to pursue its journey to become the world’s preferred destination for convenience and fuel.
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.
The acquired business is expected to generate earnings before interest, income taxes and depreciation and amortization expense (EBITDA) ranging between US$180 million and US$190 million on an annual basis, before synergies.
The corporation expects to finance the transaction by using its available cash and existing credit facilities. The parties have signed a confidentiality agreement precluding them from disclosing the purchase price at this time for this acquisition.
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 Inc.
“The acquisition of Holiday is a great fit for Couche-Tard and will allow us to continue to build on our geographical growth strategy,” said Brian Hannasch, president and CEO of Alimentation Couche-Tard Inc. “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.”
Holiday is a privately-owned company based in Minnesota that was founded by the Erickson family in 1928. The chain operates 522 stores and has a strong presence in the Greater Twin City metropolitan area; 374 stores are operated by Holiday and 148 by franchisees. The chain is present in 10 states, including six new to Couche-Tard: Minnesota, Wisconsin, Washington, Idaho, Montana, Wyoming, North Dakota, South Dakota, Michigan and Alaska.
Holiday offers top quartile convenience and fuel volumes and all sites sell fuel under the Holiday brand. Holiday also has 221 car wash locations. It operates a food commissary, which produces and provides fresh and frozen food to all stores and delivers additional fresh products to stores in the Greater Twin Cities area. The chain owns and operates a fuel terminal in Newport, Minn., which supplies one-third of stations. It employs 5,963 employees throughout its network.
“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. “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.”
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.