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$ATD.to has a strong presence in Norway. They've seen EV's coming and have plans for it.
Back of the envelope, $ATD.TO trades at 8.5x EBITDA, converts 53% of that to free cash flow, so that equates to roughly a 16x FCF multiple (6.25% fcf yield). SSS run 2-3%, so organically you're earning 8.25-9% unlevered yield here.
QuickChek as well as Speedway transacted at 14x EV/EBITDA vs. ATD's 8.5x, so the asset trades at a hefty discount to private market multiples for comparable assets. Speedway was ~$21bn so about half ATD's size.
$ATD.to has consistently derated over the past 4 years, from having formerly traded at that 14x EBITDA level, to now trading at a significant discount. Unsure why exactly, but the last few years have seen slower M&A, slower growth, and maybe higher fuel margins.
$ATD.to https://www.reuters.com/article/us-carrefour-m-a-couchetard/france-raises-food-sovereignty-concern-about-20-billion-offer-for-carrefour-idUSKBN29I1CL
France has already raised objections to this deal. So you have upside from:
1) Potential multiple expansion to 14x
2) Asia M&A/ share buybacks (which are now more accretive at lower prices)
3) They don't buy Carrefour
France has already raised objections to this deal. So you have upside from:
1) Potential multiple expansion to 14x
2) Asia M&A/ share buybacks (which are now more accretive at lower prices)
3) They don't buy Carrefour
(This is all initial DD btw). Back of the envelope upside: $6.1 billion in 2022E EBITDA x 14x = $85bn or ~$70/share, so it's a double in 2 years. I don't actually think it trades at 14x, but worth digging more.
More color on where $ATD.TO sees their assets in an EV world.
Basically, why can't they still be a charging/car wash/delivery of food company? It might not be growth, but if it keeps the cash flow intact and makes sure $ATD.TO has a terminal value, it's probably cheap today.
Basically, why can't they still be a charging/car wash/delivery of food company? It might not be growth, but if it keeps the cash flow intact and makes sure $ATD.TO has a terminal value, it's probably cheap today.
