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CIBC Raises PT On Alimentation Couche-Tard To $43 After Norway Acquisition

 April 19, 2012 10:50 AM


CIBC World Markets Inc. lifted its price target on shares of Alimentation Couche-Tard Inc. (TSE:ATD.B) to $43.00 from $33.00, saying the Canadian convenience store operator announced a "stunning and excellent" acquisition of Norway-based Statoil Fuel and Retail (SFR).

SFR operates 2300 c-stores with leading shares in Norway, Sweden and Denmark; and a growing business in CEE countries such as Poland, Russia and Lithuania.

"The risks of this acquisition are minimal, but so are the synergies...SFR will become a strong platform for Couche-tard's long-term growth in Europe," CIBC analyst Perry Caicco wrote in a note.

Caicco, who has a "Sector Performer" rating on the stock, raised his 2013 EPS estimate for the company to US$2.87 from US$2.28 and introduced 2014 EPS estimate of US$3.15.

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SFR's share price had been depressed (due largely to issues in Poland), so ATD was able to pay a 52 percent premium and still acquire the assets for just 6.9 times EBITDA, the analyst said, adding that the deal seems accretive by about 30 percent.

On Thursday, the stock lost 2.75 percent to trade at $38.51. Over the past year, shares have been trading between $24.76 and $40.38.

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