Winking owls greet drivers across Quebec as they stop for gas, snacks and drinks. This is the Alimentation Couche-Tard logo. The company has grown from a single dealership in 1980 to a $53 billion company with 16,700 owned or licensed convenience stores worldwide.
Couche-Tard, which means night owl in French, is currently going after the world’s largest convenience store chain after it rejected and swooped in on a preliminary $39 billion offer for 7-Eleven owner Japan’s Seven & i Holdings.
Industry executives, bankers and analysts say Couche-Tard’s strategy is driven by Alain Bouchard, who opened the company’s first store.
Mr. Bouchard retired as Couche-Tard’s chief executive ten years ago, but he remains deeply involved in the business, according to people familiar with the 75-year-old, now executive chairman.
He is Couche-Tard’s largest shareholder with a 12.9% stake worth C$9.2 billion (US$6.8 billion) and is one of Canada’s richest people. But he is little known outside Quebec, where he and his wife live as philanthropists.
“What he’s done is incredible,” said Sylvain Charlebois, a business professor at Dalhousie University in Halifax. “He’s a victim of his field not being seen as sexy.”
Mr. Bouchard is modest and down-to-earth, people who know him, the kind of executive who visits his store every day and picks up trash from his front yard.
According to his biographer Guy Gendron, the billionaire had a financially unstable youth.
When he was nine years old, his father’s company went bankrupt and he was forced to work in a mine in faraway Labrador, and the family moved into a mobile home. Bouchard’s mother briefly entered a psychiatric hospital, and his 12-year-old sister became the primary caregiver for him and his four other siblings.
“So Bouchard wanted revenge on her life,” Gendron told the Financial Times. “He’s a pathological entrepreneur.”
He opened his first store in a Montreal suburb in 1980, and five years later bought 11 more stores around Quebec City, retaining the brand name Couche-Tard. The company gobbled up many more chains in Canada, including Perrette, Provi-Soir, and Mac’s.
Bouchard and his three founding partners moved to the United States in the 2000s and acquired 1,600 Circle K stores from ConocoPhillips for $830 million, doubling Couche-Tard’s store footprint overnight. All of the company’s stores outside Quebec now display the Circle K banner.
Kushtar gained a beachhead in Europe when Norway’s Statoil (now Equinor) sold its Scandinavian service stations in 2012. Its presence expanded into Asia with deals in Hong Kong and Macau in 2020.
Couche-Tard store at a gas station in Montreal, near where Bouchard opened her first store in 1980 © Allen McInnis/Bloomberg
Couche-Tard stores had sales of $69 billion worldwide in the last fiscal year, with earnings before interest, taxes, depreciation and amortization of $5.6 billion. Chief Financial Officer Filipe da Silva said in an investor presentation in late 2023 that nearly three-quarters of the stores were accumulated through mergers and acquisitions.
The company aims to generate $10 billion in EBITDA by 2028, of which $1.1 billion should come from new M&A, according to its annual report. The center stage is the United States.
The largest operator in the U.S. by far is 7-Eleven, with more than 12,500 stores in the U.S., and Circle K with more than 7,100, according to Technomic. Seven & i this month rejected Couche-Tard’s proposal, saying it “significantly” undervalued the company’s business.
Mr. Bouchard is known for his deal-making skills. “He will be involved at the highest level,” said Michael van Aelst, a Montreal-based consumer staples analyst at TD Cowen.
Henry Armor, CEO of the National Association of Convenience Stores, said in a statement since Bouchard stepped down as CEO, “I see Allan as a very hands-on executive chairman.” . I think he was much less focused on operations and much more focused on acquisitions and real estate and really high-level strategy for the organization. ”
Those who know and have done business with Bouchard say his approach to M&A has evolved.
The group has a long history of bold, unilateral approaches, including the failure of Casey’s General Stores, the third-largest convenience store chain in the U.S., in 2010 and France’s Carrefour in 2021. There is. This effort was abandoned due to opposition from Paris.
“If you look back at his career over the last 20 years, he’s cheap,” said one senior businessman who does business with Bouchard. “And you have to give him credit for that. . . . for trying to get the best assets possible for the cheapest possible price.”
One fund manager who has been supportive of Seven & i’s proposal said he could not believe that Mr. Coucheard and Mr. Bouchard were prepared to walk away this time. “The opening offer from Couche-Tard was laughably low,” he said. “He must have known it would be rejected. . . . I’m sure it was just a starting point.”
After Seven & i rejected its initial offer this month, Couche-Tard said it remained “very focused” on proceeding with a friendly acquisition.
Mr. Coucheard and Mr. Bouchard declined to comment. The company previously said the combination with Seven & i would create a “world-leading retail platform” with more than 100,000 locations across Asia, North America, Australia and Europe.
JPMorgan analysts said the combined company would have a 12.5% market share in the U.S., even if 10% of its stores were closed due to obvious competitive concerns, and that it would have “seven times the number of stores.” “It will take a dominant position.” Casey’s.”
Analysts say it’s precisely because of such opportunities and the ability to limit the risk of 7-Eleven’s growing strength in the U.S. that Couche-Tard has toured 7 & i over the years and repeatedly in hopes of paving the way. He says he has made an application. For friendly trade.
“At the end of the day, this is probably a defensive bid,” said Michael Causton, co-founder of retail research firm Japan Consumer. “Because Seven & i will be able to apply the logistics capabilities and relentless product development schedule of its Japanese operations to the U.S. . . . That will hurt competitors like Couche-Tard.”
Bouchard is in no rush, people familiar with the matter said.
“The Couche-Tard logo is a night owl with one eye closed and the other open,” Gendron said. “This is a symbol of how the company operates: patiently waiting for its prey like a vigil.”
