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Couche‑Tard Offers $8.7 Billion for Poland’s Żabka

An all-debt tender aims to add about 13,000 stores, expand Couche‑Tard’s digital reach, increase leverage to roughly three times net debt to EBITDA.

The storefront of a Couche Tard convenience store in Quebec. The parent company of the chain made a $12 billion offer for a controlling stake in Polish convenience store operator Zabka Group.
A Couche-Tard gas station and convenience store is seen in Vaudreuil-Dorion, Quebec, March 16, 2023. (Christinne Muschi /The Globe and Mail)
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Overview

  • Couche‑Tard launched a voluntary tender offer at 32 Polish zloty per share to buy Żabka in a transaction valued at about US$8.7 billion.
  • Shareholders representing roughly 57% of Żabka, including private equity firms CVC Capital Partners and Partners Group, have agreed to tender their stakes.
  • Couche‑Tard plans to fund the deal with fully committed debt facilities led by J.P. Morgan with National Bank of Canada Capital Markets and Bank of Nova Scotia as joint bookrunners.
  • The company projects about US$250 million in cost synergies within three years, expects adjusted-EBITDA margin to improve immediately and earnings per share to be accretive by the second year after closing.
  • Couche‑Tard says it will preserve Żabka’s brand and management, may seek to delist the company if it secures at least 95% voting control, and expects closing around December subject to tender outcomes and regulatory approvals.