Business Context and Reporting Period
This Form 8-K Current Report, dated June 28, 2017, covers CrossAmerica Partners LP (the "Partnership"). The filing reports the consummation of a previously announced merger agreement between CST Brands, Inc. ("CST"), Circle K Stores Inc. ("Circle K"), and Ultra Acquisition Corp. ("Merger Sub"). Circle K is a wholly-owned subsidiary of Alimentation Couche-Tard Inc. ("Couche-Tard").
Key Financial Metrics
This filing is a current report regarding a change in control and does not contain periodic financial statements. Consequently, specific metrics for revenue, profit, cash flow, margins, debt, and liquidity are not provided in this document.
Merger Consideration: Each share of CST common stock was converted into the right to receive $48.53 in cash per share, without interest and subject to applicable withholding taxes.
Material Changes Versus Prior Period
- Change in Control: Merger Sub merged with and into CST. CST survived as an indirect, wholly-owned subsidiary of Circle K.
- Ownership Structure: Circle K indirectly acquired all equity interests in the General Partner (CrossAmerica GP LLC), a 20.5% limited partner interest in the Partnership, and all incentive distribution rights.
- Management Control: Circle K, through its ownership of the General Partner, now has the ability to appoint all members of the board of directors and control the operations of the Partnership.
Guidance, Outlook, and Management Commentary
Board of Directors Changes:
- Resignations: Kimberly S. Lubel, Clayton E. Killinger, and S. Eugene Edwards voluntarily resigned from the board of directors of the General Partner. These resignations were not due to disagreements regarding operations or policies.
- Appointments: Timothy Alexander Miller (appointed Chairman), Claude Tessier, Jean Bernier, and Mickey Kim were appointed to the board. Messrs. Reilly, Gannon, and Kim will comprise the audit and conflicts committees.
Officer Changes:
- Resignations: Clayton E. Killinger (CFO), Hamlet T. Newsom, Jr. (General Counsel), Steven M. Stellato (Chief Accounting Officer), and David Hrinak (COO) resigned.
- Appointments: Jeremy L. Bergeron was appointed President and CEO; Matthew McCure was appointed Vice President Operations; Evan W. Smith was appointed Vice President Finance and CFO.
Employment Status: Newly appointed officers are employed by Circle K and its affiliates, not directly by the Partnership. They participate in Circle K benefit plans, and the Partnership does not control their compensation.
Important Facts for Investor Verification
- Verify the final cash consideration of $48.53 per share received by CST shareholders.
- Confirm Circle K's new ownership stake of 20.5% in the Partnership and its control over the General Partner.
- Review the new leadership team's background, specifically their prior roles at Couche-Tard and Valero Energy Corporation.
- Check subsequent filings for the impact of this merger on the Partnership's future distribution policies and capital structure.