CST Brands (CST) Agrees To Buyout By Canada's Couche-Tard Inc.

Canada-based Alimentation Couche-Tard Inc. agreed to buy CST Brands (NYSE:CST) on Monday for $48.53 per share, or $4.4 billion overall including the assumption of net debt.

Based in San Antonio, TX, CST retails motor fuels and convenience merchandise in North America. The company has 1,900 locations in the United States and Canada.

The deal represents a 42% premium to CST’s closing price on March 3, the last day before the company announced it would begin exploring strategic alternatives, after which shares of the stock surged.

Couche-Tard, French for “Night owl,” is the largest convenience store company in Canada, and operates more than 12,000 locations globally. The company has now announced four acquisitions this year, and continues to consolidate the convenience store industry in the process.

Couche-Tard President and CEO Brian Hannasch stated that “With this transaction we would strategically strengthen our positioning in both the “sun belt” and the east coast of North America. Our teams are looking forward to meeting CST customers and welcoming them into the Couche-Tard family.”

In order to finance the move, Couche-Tard is drawing on available cash, existing credit lines, as well as a new term loan. The deal is expected to close early next year.

CST was originally spun-off from Valero Energy Co. (NYSE:VLO) in 2013. The move was meant to allow Valero to focus on refinery while CST could focus on retail. Last year, CST reported $11.4 billion in revenue.

Alongside the acquisition, Couche-Tard also entered an agreement with Parkland Fuel Corporation to sell certain Canadian assets of CST for $750 million. Furthermore, it announced that it will establish a new business unit in San Antonio.

Couche-Tard has announced eight acquisitions since 2014, and is making strides towards dominating the convenience industry, with this move providing the latest boost in that endeavor. The company only trades on the Toronto Stock Exchange.