HOULTON – Irving Oil Limited and Alimentation Couche-Tard Inc. announced the expansion of their existing partnership to include 252 Irving Oil convenience retail sites across Atlantic Canada and New England and most recently the Blue Canoe on North Street in Houlton.
Seven years ago, Couche-Tard and Irving Oil entered into a convenience retail partnership in the Province of Quebec. The expanded partnership will provide both Couche-Tard and Irving Oil with opportunities to serve more customers and to grow in the Northeast, including the southern New England states, New York, New Jersey, and Pennsylvania. The transaction is anticipated to close in July and is subject to standard regulatory approvals and closing conditions.
Under the expanded partnership, 252 Irving Oil convenience stores located in Atlantic Canada and New England would be operated by Couche-Tard. Of these stores, 128 are located in New Brunswick, Nova Scotia, Newfoundland and Labrador, and Prince Edward Island. The other 124 stores are located in Maine, New Hampshire, Massachusetts and Vermont. Irving Oil would retain ownership of the convenience retail properties and Couche-Tard would lease the properties at market value for the next 20 years, and buy the store equipment and inventories by using internal available cash dollars. Irving Oil would continue to supply petroleum products to the sites. The fuel pumps and canopies at the sites would remain Irving-branded and the stores would be operated under a Couche-Tard brand.
The sites involved have annual average merchandise sales of approximately $1.2 million per company-operated site. The annual average petroleum volume of the US sites is approximately 2.0 million gallons per site and the annual average petroleum volume of the Canadian sites is approximately 4.4 million liters per site. Following a 12-month integration period, it is expected that the average store earnings before interest and taxes would be aligned with Couche-Tard’s company operated store performance. Pursuant to this agreement, the parties would share net operating income. According to a confidentiality agreement between the parties, the financial arrangements between the parties cannot be disclosed at this time.
“Subsequent to this transaction, Couche-Tard’s Eastern Canada Division would include a total of 693 company operated stores and the Great Lakes Division would include 432 company operated stores,” said Brian Hannasch, Couche-Tard’s Senior Vice-President, U.S. Operations. “We are very excited to expand our relationship with Irving. Our relationship over the last seven years has been very strong and has proven to be beneficial to both companies. This transaction also marks Couche-Tard’s entry into the Northeast US and Atlantic Canada and the unique opportunity to do so with one of the most well recognized fuel brands and strongest retail networks in this geography.”