Denis O’Brien sells Topaz to giant Canadian retailer

Ireland’s largest convenience and fuel retailer, Denis O’Brien’s Topaz Energy Group is being sold to Alimentation Couche-Tard, a Canadian convenience and fuel retailing giant. The deal is believed to worth in the region of €450m.

The two companies have signed an agreement that will lead to the acquisition by the Canadian company of Topaz Energy Group. The deal will include linked companies Resource Property Investment Fund and Esso Ireland, which it recently-acquired. The deal should be completed next spring (2016), subject to the regulatory approvals and closing conditions.

In its accounts, covering the year to March 31, 2014, Topaz reported a pre-tax profit before exceptional items of €2.1m on a turnover of just less than €3bn. When exceptional items of €6.9m are taken into account (mostly associated with restructuring the group’s borrowings), pre-tax losses stood at €4.7m at the end of the period compared to losses of €13.6m for the equivalent period a year earlier.

2014 was a transformative year for the Topaz business. It reported that it successfully concluded a major restructuring of the group balance sheet which saw a significant investment by shareholders (€128.5m) and a corresponding reduction in group borrowings of over €120m, which reduced group debt by approximately 85%. In February, Topaz also announced a €20m investment programme in its their network.

Couche-Tard is one of the world’s biggest convenience and fuel retail businesses, with about 15,000 sites in North America (USA and Canada), Europe (Norway, Sweden, Denmark, Poland, the Baltics and Russia), Asia and the Middle East. It has approximately 100,000 people are employed in its network across the world.

The Topaz network comprises 464 service stations on the island of Ireland, 162 of which are company owned, and a commercial fuels operation with more than 30 depots. The business employs over 2,000 people in Ireland.

Topaz chairman John Callaghan said: “The last two years have been a period of phenomenal development and improvement for the company. With the steadfast support of the board, our management and staff, we have established a well-capitalised group of growing businesses which, with the recent amalgamation of Esso in Ireland, is the undoubted industry leader.

“We are delighted to have agreed this transaction with Couche-Tard, which is recognised as a world leader in the fuel and convenience store industry. We know it will build on the foundations we have put in place and bring a new dimension to the industry in Ireland to the benefit of the economy, our customers and our staff. We wish Couche-Tard well and look forward with confidence to an exciting future.”

Emmet O’Neill, chief executive of Topaz, described the transaction as a “game changer’ for the retail sector in Ireland. He said: “Couche-Tard is one of the strongest names in retail in the world and their presence in Ireland will transform the retail sector here. I am thrilled that they have chosen Topaz as the foundation for their entry to the Irish market. They will bring enormous skill, energy and resources to this business and this market.”

O’Neill said that the deal followed a transformation of the company over the past two years, explaining: “In the last two years Topaz has moved from being a challenged business to one which has been transformed at every level and which now leads the market here. We have refinanced the company, upgraded the infrastructure, acquired and built new sites and convenience stores and ultimately acquired the business of Esso in Ireland. Today’s transaction is a reflection of the immense effort made by everyone on the team and across the company over that time.”

In May last year, former Taoiseach Brian Cowen and former AIB chief executive Colm Doherty were among six people to be appointed to the board of fuel supply chain Topaz Energy Group. Denis O’Brien was also appointed a non-executive director at the firm along with Sean Corkery, chairman and CEO of SiteServ, which Mr. O’Brien bought in 2013. Lucy Gaffney, chairperson of Mr. O’Brien’s Communicorp Group, and Emmet O’Neill; co-founder of Smiles Dental made up the six new appointments.