Alimentation Couche-Tard Inc. expanded its U.S. presence Monday by signing an agreement with ConocoPhillips to acquire convenience store chain The Circle K Corp. for $830 million.
The net price includes assumed debt of $9.1 million.
Class B shares of Couche-Tard jumped 6.7 percent, or C$1.15, to C$18.25, a new 52-week high.
The deal will make Montreal-based Couche-Tard, Canada’s No. 1 convenience store operator, the fourth-largest convenience store operator in North America with a combined network of 4,630 stores, it said. Currently, it is No. 7 behind 7-Eleven and five oil companies.
The Circle K acquisition expands Couche-Tard’s U.S. presence in markets such as Arizona with more than 500 stores and Florida with 350 stores.
Couche-Tard, which made its first purchase in the United States in May 2001, has steadily added to its network since then.
Couche-Tard said the latest deal is expected to immediately add to earnings per share, but did not specify by how much. Last month, the company’s first-quarter profit jumped 20 percent because of continuing expansion in the United States.
Couche-Tard will finance the acquisition by issuing C$223 million of class B subordinated voting shares in a private placement, while debt financing will be arranged by National Bank Financial, Scotia Capital and CIBC World Markets totaling about C$1.2 billion.
Couche-Tard will also secure a revolving credit facility of C$150 million for working capital purposes.
Most Circle K employees are expected to be retained, Couche-Tard said.
Houston-based petroleum company ConocoPhillips said it expected the deal to close in the fourth quarter. It would use the proceeds to pay down debt.
Late last year, ConocoPhillips said it would sell a substantial portion of its retail marketing assets and exit certain geographic regions so that it could focus on its wholesale business.
The deal is subject to standard regulatory approvals.