Alimentation Couche-Tard Inc. and motor fuel distributor CrossAmerica Partners LP on Sept. 5 said they executed the second tranche of an asset exchange program that they now expect to be completed sooner than expected.
In the latest exchange, Canadian convenience store operator Couche-Tard, owner of Circle K Stores, transferred 56 convenience and fuel retail stores worth about US$50.2 million to CrossAmerica. In return, Pennsylvania-based CrossAmerica transferred to Couche-Tard assets worth US$51.4 million, including the real property for 19 master lease properties.
The transaction is part of a December 2018 asset exchange agreement under which Couche-Tard agreed to sell 192 Circle K convenience and fuel retail stores in the U.S. to CrossAmerica for US$184.5 million. Under the terms of the deal, CrossAmerica agreed to sell assets of the same value to Couche-Tard.
The first tranche of the program was completed in May 2019 when Couche-Tard transferred 60 convenience and fuel retail stores worth about US$58.1 million to CrossAmerica, while CrossAmerica transferred assets worth about US$58.3 million to Couche-Tard.
Before exchanging assets, Couche-Tard executed agreements for the transferred Circle K stores with independent dealers to lease and operate the stores after the exchange. The agreements, which include leases and fuel supply pacts, also were transferred to CrossAmerica in the exchange.
Couche-Tard will supply fuel to CrossAmerica for resale to the dealers at the 56 stores after the exchange. The existing fuel supply arrangements for the 19 master lease properties will not be changed.
The companies expect to complete the remaining exchange of assets in a series of transactions before the end of the first quarter of 2020, ahead of the two years originally envisaged.
