Weighing in on M&A

Published in CSP Daily News

CSP polls show more than 1/3 of industry looking to consolidate

OAK BROOK, Ill. -- Is more consolidation likely in the convenience store industry? All signs point to yes, according to a series of CSP Daily News polls, created in conjunction with NRC Realty Advisors LLC, run this past week. The polls were conducted in anticipation of the upcoming Outlook Leadership Conference to be held in Salt Lake City, Aug. 7-10.

According to the results, more than 36% of respondents plan to sell off all (13.9%) or some (22.3%) of their stores in the next 12 months. Another 11.4% said they may sell some stores in the next year. [image-nocss] Similarly, 42% of respondents said they are in the market to purchase properties or expand their business by buying or merging with another company within the next 12 months.

About 15% of respondents said they may make a purchase in the next year, while 36% said they don't anticipate any expansion. (Another 7% responded, I'm not sure.)

Where's most of this activity going to take place? Some 50% of respondents said they believe the East and Southeast regions of the United States are most ripe for convenience store consolidation. The Plains region was cited as least-likely (3.4%) to see merger and acquisition activity.

Meanwhile, more than half (55%) of the respondents to another poll question said they anticipate making significant capital expenditures in their retail business within the next 12 months. This could come in the form of store remodels, rebuilds or other investments. Only 30% said they will not be making significant capital expenditures in the next year.

How will these companies fund these expenditures? Most (40%) said mortgage financing was the way to go, while 21% said they'd use a combination of mortgage and sale-leaseback financing. Some 15% percent said they'd go exclusively with sale-leaseback financing, and another 15% said none of the above, perhaps opting to pay cash outright.

The above information was gathered over five days of polling on CSP Daily News. The poll questions were developed in cooperation with NRC Realty Advisors, the national leader in the structured sale of commercial real estate. The Chicago-based company offers a complete range of financial and real-estate-advisory services. The number of respondents for each question ranged from 236 to 87.

Dennis Ruben, managing director of NRC, will moderate a panel discussion with industry leaders regarding the financial and capital markets affecting the convenience store and petroleum industries during the Outlook Leadership Conference. CSP and NRC believe that the poll results are a strong indication of the future of the industry and the financial and capital needs of its participants. CSP and NRC are founding and title sponsors, respectively, of the conference.

More information about the Outlook Leadership Conference is available by contacting Bryn Cotton at (800) 889-8377 or emailing him at bcotton@leadershipsite.com.The complete conference agenda can be found at www.outlookconference.com.