Bouchard’s move to take control of 7-Eleven’s parent and global leadership in convenience stores faces challenges, but they aren’t insurmountable
Couche-Tard founder and Chairman Alain Bouchard speaks to shareholders the company's annual meeting on Sept. 18, 2019 in Laval, Que.In 1980, two Quebeckers from the humblest of backgrounds launched careers destined to carry them to the top of their professions.
Couche-Tard shareholders also showed they are unfazed by the possibility of the historically conservatively financed retailer borrowing heavily to pay for a US$40-billion-plus acquisition. On Monday, RBC Capital Markets analyst Irene Nattel said in a report: “The approach is steeped in Couche Tard’s DNA: it is bold, it is measured, and if successful would be the culmination of a journey to become the largest c-store operator in the world.
Early this year, Couche-Tard set an ambitious goal of doubling its earnings before interest, taxes, depreciation and amortization to US$10-billion in four years’ time. In a report on Monday, analyst Tyler Tebbs at Tebbs Capital said that acquiring Seven & i would fit “the ambition of Alain Bouchard and his appetite for a very big gulp that would catapult him to his 2028 target overnight.”
In 2020, Seven & i expanded in North America by acquiring Marathon Petroleum Corp.’s Speedway gas stations for US$21-billion, topping Couche-Tard for the prize. Since then, valuations for the two chains have gone in opposite directions. Seven & i’s shares have underperformed peers and now trade at nine times the company’s EBITDA, according to Ms. Nattel, while Couche-Tard stock commands a higher premium of 12.5 times EBITDA.
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