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Goodbody: Couche-Tard Acqusition Of Topaz Is A 'Positive'

Goodbody Stockbrokers has said that it views Couche-Tard's acquisition of Topaz as a 'positive' for the industry, as the publicly-quoted company will "have to take a rational approach to sales growth and profitability".

Goodbody analyst Patrick Higgins was commenting following a conference call about the deal, at which it was noted that many Topaz-branded stores will be rebranded to Couche-Tard’s Circle K brand (pictured) gradually, and it may also retain some Esso branded stores for a time.

Checkout understands that once the deal passes competition approval, the Irish business will be operated by Jørn Madsen, the current executive vice president of Couche-Tard's Statoil Fuel & Retail AS division in Central and Eastern Europe.

"[Couche-Tard] doesn’t envisage any significant new capex as the Topaz network is well invested," Patrick Higgins added. "No specific decision has been made on fuel pricing strategy (currently priced at a premium), though EBITDA margins per store in company-owned sites are similar to Couche-Tard."

Goodbody estimates that Topaz accounts for approximately 36% of total fuel volumes on the island of Ireland. As of October 2015, Couche-Tard’s network comprised 8,006 convenience stores throughout North America, as well as some 2,217 stores across Scandinavia (Norway, Sweden and Denmark), Poland, the Baltics (Estonia, Latvia and Lithuania) and Russia.

Media reports last week estimated the value of the deal at around €450 million, however both parties have agreed not to disclose the exact figure.

© 2015 - Checkout Magazine by Stephen Wynne-Jones

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