Parent of Circle K buying Texas-based CST Brands for $4.4B

Not all acquisitions and mergers are beneficial to the company and shareholders. Finally, National Bank Financial cut their price target on Alimentation Couche-Tard from C$69.00 to C$68.00 in a report on Thursday, July 7th. It indicates that Couche-Tard is putting capital to good use, as its ROE has ranged from 19% to 25% since 2009.

Laval, Quebec-based Alimentation Couche-Tard said Monday that it would pay $48.53 per share for CST, which operates more than 2,000 stores in North America, sells various food and drink products such as the Icee brand and distributes transportation fuel. The total enterprise value of the deal would be approximately $4.4 billion including net debt assumed.

Couche-Tard’s President and Chief Executive Officer Brian Hannasch said in a company release, “CST is an excellent company and is well positioned in the Southwestern United States with an important presence in Texas, Georgia, in the U.S. Southeast Region, New York and Eastern Canada”.

ALLENTOWN-For the second time in two years, Allentown-based service station real estate owner, lessor, supplier and operator CrossAmerica Partners has new owners. This will take place after the CST acquisition is completed, which is expected to take place in early 2017. Couche-Tard intends to use the sale proceeds to repay part of its credit facilities.

CST Brands, Inc.is a holding company.

In an interview with BNN on Monday, Bruce Campbell, president and portfolio manager at Campbell, Lee & Ross highlighted Couche-Tard’s strong track record in finding synergies in its takeover deals.

Alimentation Couche-Tard Inc (TSE:ATD.B) had its price objective upped by stock analysts at Desjardins from C$68.00 to C$74.00 in a research note issued to investors on Tuesday. “I’m very happy to see this next chapter begin as our network joins with Couche-Tard”.