ALIMENTATION COUCHETARD $44.55 - Toronto symbol ATD.B

ALIMENTATION COUCHETARD $44.55 (Toronto symbol ATD.B; TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couchetard. com; Shares outstanding: 565.8 million; Market cap: $25.4 billion; Dividend yield: 0.4%) is buying The Pantry (symbol PTRY on Nasdaq), which operates more than 1,500 convenience stores in 13 southern U.S. states.

Couche-Tard will pay $1.7 billion—$ 860 million in cash and the assumption of $840 million of debt. This is its biggest purchase since it paid $2.7 billion U.S. for Norway’s Statoil Fuel & Retail gas station chain in June 2012.

Founded in 1967, The Pantry mainly grew through acquisitions beginning in the late 1980s. Like Couche-Tard, it focuses on selling higher-margin fresh food. It sells its own private-label bottled water and is the fifth-largest location for Subway restaurants.

Growth by acquisition can be risky, especially with a deal this big. But Couche-Tard has a long record of successfully integrating acquisitions.

Couche-Tard was our #1 buy for 2012. It has risen over 347% for us since then, but we think it has more gains ahead.

Alimentation Couche-Tard is a buy.

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