Couche-Tard expects to finance the transaction by using available cash and existing credit facilities. The deal is subject to regulatory approvals and closing conditions and should close in the fourth quarter of Couche-Tard’s 2018 fiscal year. Couche-Tard expects the acquisition to generate earnings before interest, income taxes and depreciation and amortization expense between $180 million and $190 million, before synergies.
“The acquisition of Holiday is a great fit for Couche-Tard and will allow us to continue to build on our geographical growth strategy,” Brian Hannasch, president and CEO of Couche-Tard, said in a statement. “The Erickson family and its management team have created one of the strongest, well-run companies in the northern tier region of the US with a great brand and consumer offer. We are pleased to welcome the Holiday brand and its highly successful programs to the family.”
Holiday, founded by the Erickson family in 1928, is a privately owned company based in Minnesota. The company is considered a leading player in the Upper Midwest c-store market with 522 stores and a strong presence in the Greater Twin City metro area. Holiday Stationstores are located in Minnesota, Wisconsin, Washington, Idaho, Montana, Wyoming, North Dakota, South Dakota, Michigan and Alaska. Six states are new markets for Couche-Tard.
In addition to a fuel terminal in Newport, Minnesota, Holiday operates a strong carwash business with 221 locations and a food commissary that produces and provides fresh and frozen food to all stores and delivers additional fresh products to stores in the Greater Twin Cities metropolitan area.
“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.”
Couche-Tard is a leading operator in the Canadian convenience store industry. The company also is the largest independent c-store operator in the United States based on the number of company operated stores.