CST Brands (CST) Enters $4.4B Merger Agreement with Alimentation Couche-Tard

August 22, 2016 7:00 AM EDT

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CST Brands, Inc. (NYSE: CST) announced that its Board of Directors has unanimously approved a definitive merger agreement with Alimentation Couche-Tard Inc., under which Couche-Tard will acquire all of the shares of CST for $48.53 per share in cash, representing a total enterprise value of approximately $4.4 billion, including the assumption of net debt.

The transaction value represents a premium of approximately 42 percent to CST’s closing stock price on March 3, 2016, the last date prior to CST announcing that its Board commenced an exploration of strategic alternatives to further enhance stockholder value. The transaction also represents a premium of approximately 61 percent since May 1, 2013, the last date prior to regular way trading of CST following the Company’s spin off.

Couche-Tard is a global leader in the convenience and fuel retail industry, with a strong Circle K brand across the U.S. Together, Couche-Tard and CST will join on the journey to become the world’s preferred destination for convenience and fuel.

“After the Board’s comprehensive review of strategic alternatives to enhance stockholder value, we are pleased to reach this agreement with Couche-Tard, which we expect to provide immediate and compelling value to our stockholders,” said Kim Lubel, Chairman, Chief Executive Officer and President of CST. “Our Board believes that Couche-Tard is an ideal partner for CST. With Couche-Tard, we will build upon an extensive and attractive convenience and fuel network with enhanced scale and global reach to best position the combined company for future growth. Importantly, our employees will benefit from new opportunities for career development as part of a larger, global company. We look forward to working closely with Couche-Tard to seamlessly complete the transaction and ensure a smooth integration.”

New Circle K Division in San Antonio

Upon completion of the transaction, Circle K will establish a new business unit in San Antonio with attached shared services operations.

Transaction Details and Approvals

Couche-Tard expects to finance the transaction with available cash, its existing credit facilities and a new term loan. The transaction is currently expected to close early calendar year 2017, subject to the approval of CST's stockholders and regulatory approvals in the United States and Canada.

Advisors

BofA Merrill Lynch is serving as lead financial advisor and J.P. Morgan Chase is also serving as financial advisor to CST. Wachtell, Lipton, Rosen & Katz and Stikeman Elliott are acting as legal advisors to CST.



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