CST Brands

CST Brands, Inc. was a publicly traded North American fuel and convenience-store company created when Valero Energy Corporation separated its retail operations in 2013. The business was established as part of Valero’s effort to concentrate more heavily on refining while placing its network of service stations, convenience stores, and related fuel activities in an independent company. CST was headquartered in San Antonio, Texas, and maintained a Canadian regional office in Montreal. At its height, CST was one of the largest convenience and fuel retailers in North America, operating roughly 1,900 locations in the United States and Canada and employing approximately 12,000 people. Its U.S. operations were concentrated in Texas, Louisiana, Arkansas, Oklahoma, New Mexico, Colorado, Wyoming, Arizona, California, Georgia, Florida, New York, and other surrounding markets. The principal U.S. retail identity was Corner Store. In English-speaking parts of Canada, the company also used the Corner Store name, while its Quebec-facing stores operated under the Dépanneur du Coin banner. Fuel was sold through a mixture of licensed energy brands, including Valero, Exxon, Shell, and Phillips 66, rather than through one universally applied CST fuel identity. In Canada, CST operated a substantial Ultramar-branded network across Quebec, the Atlantic provinces, and eastern Ontario. The Canadian business also included home-heating-oil distribution and card-lock fuel sites serving trucking and commercial customers. CST’s convenience offer combined fuel, tobacco, packaged snacks, drinks, fresh food, coffee, baked goods, and private-label merchandise. Product and food identities included Fresh Choices sandwiches and salads, U Force energy drinks, Cibolo Mountain coffee in the United States, Transit Café coffee and bakery products in Canada, FC bottled sodas, and Flavors 2 Go fountain beverages. Some stores included Subway restaurants. Fresh food and bakery sales were an important part of the company’s attempt to distinguish its stores from basic fuel stations. The company expanded through acquisitions. In 2014 it bought Lehigh Gas GP LLC, the general partner of Lehigh Gas Partners, together with associated incentive distribution rights; the partnership was subsequently renamed CrossAmerica Partners. CST also acquired assets of Nice N Easy Grocery Shoppes in New York and purchased Flash Foods, a Georgia and North Florida chain, in 2015. These transactions broadened its geographic footprint and added established regional store banners. In August 2016, Alimentation Couche-Tard, the Canadian parent of Circle K, agreed to acquire CST in an all-cash transaction valued at approximately $4.4 billion including assumed net debt. The transaction closed on June 28, 2017. CST ceased to operate as an independent public company. Most former CST banners, including Corner Store, Flash Foods, and Nice N Easy Grocery Shoppes, were subsequently converted or remodeled under the Circle K brand. Much of the Canadian Ultramar operation was sold to Parkland Corporation, while Couche-Tard retained selected sites and converted them to Circle K and, in some cases, Irving branding.

CST Brands originated in Valero Energy Corporation’s decision to separate its retail operations from its refining-centered business. The separation became effective on May 1, 2013, creating an independent publicly traded company headquartered in San Antonio. CST inherited a large network of fuel stations and convenience stores in the United States and Canada, together with associated supply, distribution, and commercial-fuel activities. Its initial network made it one of the largest businesses of its type in North America. The company’s reported 2013 revenue was approximately $12.8 billion and its EBITDA was approximately $360 million, according to the company information summarized in the cited reference. The business operated through several customer-facing identities. Corner Store was the principal U.S. banner and was also used in English-speaking Canadian markets. Quebec stores used the French-language Dépanneur du Coin identity. Canadian fuel operations were strongly associated with Ultramar, while U.S. sites could sell fuel under licensed brands such as Valero, Exxon, Shell, and Phillips 66. This multi-banner model reflected the company’s inherited portfolio and the different branding arrangements used across regional fuel markets. CST sought to increase the role of food and merchandise rather than rely exclusively on fuel margins. Its stores sold snacks, tobacco, packaged and fresh foods, drinks, coffee, fountain beverages, and baked goods. Fresh Choices products, U Force energy drinks, Cibolo Mountain coffee, Transit Café products, and other private-label lines supported the company’s effort to build repeat convenience-store traffic. Some locations also hosted Subway restaurants. CST promoted fresh bakery items including kolaches and whoopie pies, and it used a food truck to market its whoopie pies at festivals and other events. Expansion was a central part of CST’s strategy. In 2014 the company agreed to acquire Lehigh Gas GP LLC, the general partner of Lehigh Gas Partners LP, from Lehigh Gas Corp. The transaction closed on October 1, 2014, and the partnership was renamed CrossAmerica Partners LP, which continued trading under the CAPL ticker. CST also purchased assets of Nice N Easy Grocery Shoppes, a New York-based operator, adding more company-operated stores to its portfolio. In November 2015, it agreed to buy Flash Foods, giving it a larger presence in Georgia and North Florida. The Canadian network extended beyond ordinary retail fuel sites. CST operated more than 840 Ultramar retail locations in Quebec, the Atlantic provinces, and eastern Ontario, was a major home-heating-oil distributor in eastern Canada, and operated approximately 80 card-lock locations for trucking and commercial fleets. These operations gave the company exposure to consumer convenience retail as well as transport and heating-fuel demand. CST’s independent existence ended after Alimentation Couche-Tard agreed in August 2016 to purchase the company. The transaction closed on June 28, 2017. Couche-Tard integrated the acquired stores into its Circle K system, converting and remodeling many former Corner Store, Flash Foods, and Nice N Easy locations. Parkland Corporation acquired most of CST’s former Ultramar operations, while Couche-Tard retained a smaller group of Canadian locations and rebranded them primarily under Circle K or Irving. CST therefore survives mainly as a predecessor business and collection of former regional banners within larger fuel-and-convenience networks.

• 2017

  CST acquisition completed

  [1]CST Brandsen.wikipedia.org

  Couche-Tard completed its acquisition of CST on June 28, 2017, ending CST’s independent corporate existence.

• 2016

  Couche-Tard merger agreement

  [1]CST Brandsen.wikipedia.org

  Alimentation Couche-Tard agreed to acquire CST in an all-cash transaction valued at about $4.4 billion including assumed net debt.

• 2015

  Flash Foods purchase agreed

  [1]CST Brandsen.wikipedia.org

  CST agreed to acquire the 164-store Flash Foods chain in Georgia and North Florida.

• 2014

  Lehigh Gas GP acquisition announced

  [1]CST Brandsen.wikipedia.org

  CST agreed to acquire Lehigh Gas GP LLC and associated incentive distribution rights.

• 2014

  Lehigh transaction closes

  [1]CST Brandsen.wikipedia.org

  The transaction closed on October 1, and Lehigh Gas Partners was renamed CrossAmerica Partners LP.

• 2014

  Nice N Easy assets targeted

  [1]CST Brandsen.wikipedia.org

  CST announced the acquisition of assets from Nice N Easy Grocery Shoppes in New York.

• 2013

  Retail operations spun off from Valero

  [1]CST Brandsen.wikipedia.org

  Valero Energy separated its retail operations on May 1, creating CST Brands as an independent publicly traded fuel and convenience retailer.

Regional and national-scale fuel-and-convenience retailer combining gasoline sales with quick-service food, beverages, private-label products, and commercial fuel services.

• Convenience-store retail banner

  Corner Store

  Corner Store was CST’s primary U.S. retail banner and was also used in English-speaking Canadian markets. Stores combined fuel sales with snacks, tobacco, beverages, fresh food, coffee, bakery items, private-label merchandise, and selected foodservice partnerships such as Subway. After the Couche-Tard acquisition, many locations were remodeled and converted to Circle K.

• Convenience-store retail banner

  Dépan​neur du Coin

  Dépan​neur du Coin was CST’s French-language convenience-store identity in Quebec and other French-speaking Canadian markets. It served the same broad convenience and fuel needs as the Corner Store network while adapting the customer-facing name to the local linguistic market.

• Fuel and convenience network

  Ultramar

  Ultramar was the principal Canadian fuel identity associated with CST’s network in Quebec, the Atlantic provinces, and eastern Ontario. The broader Canadian business also included home-heating-oil distribution and card-lock sites for commercial fleets. Most of these operations were later sold to Parkland Corporation, with selected locations retained and rebranded by Couche-Tard.

• Private-label fresh food

  Fresh Choices

  Fresh Choices was a CST private-label line covering products such as sandwiches, salads, and other packaged fresh foods. It supported CST’s effort to increase foodservice and higher-frequency convenience purchases inside its stores.

• Coffee and bakery products

  Cibolo Mountain and Transit Café

  Cibolo Mountain was used for coffee products in the United States, while Transit Café was associated with coffee and bakery offerings in Canada. Together they represented CST’s market-specific approach to beverage and prepared-food merchandising.

• Energy drinks

  U Force

  U Force was CST’s private-label energy-drink line, part of the company’s broader range of proprietary beverages and convenience merchandise.

• 2013Whoopie pie food-truck promotion

  United States

  CST used a branded food truck to promote its whoopie pies at festivals and events in markets served by the company. The activity extended the Corner Store food offer beyond the store environment and capitalized on the popularity of the baked product.

  Outcome. The campaign was described as a promotional extension of CST’s fresh-food and bakery merchandising; a longer-term outcome was not reported.

  Source

• 2016

  Accept Alimentation Couche-Tard acquisitionM&A

  Background

  CST was approached by Alimentation Couche-Tard, a major international convenience-store operator seeking to expand its North American network.

  Action taken

  CST entered an all-cash merger agreement valued at approximately $4.4 billion including assumed net debt.

  Aftermath

  The transaction closed in 2017. CST ceased to be independent, and many of its banners were converted to Circle K.

  Transaction value including assumed net debt. Approximately $4.4 billion (Announced August 22, 2016; closed June 28, 2017)

  Source

• 2014

  Acquire Lehigh Gas GP LLCM&A

  Background

  CST pursued additional exposure to fuel distribution and partnership economics beyond its directly operated retail stores.

  Action taken

  The company agreed to acquire Lehigh Gas GP LLC and associated incentive distribution rights; the transaction closed on October 1, 2014.

  Aftermath

  Lehigh Gas Partners was renamed CrossAmerica Partners LP and continued under the CAPL ticker.

  Source

• 2013

  Separate the retail business from Valero’s refining operationsStrategy

  Background

  Valero sought to focus more closely on refining while placing its retail fuel and convenience operations in a separate company.

  Action taken

  CST Brands was created through a spin-off that became effective on May 1, 2013.

  Aftermath

  CST operated independently until its acquisition by Alimentation Couche-Tard in 2017.

  2013 revenue. Approximately $12.8 billion (2013)

  Source

1. 1CST Brandsen.wikipedia.org