Longer lives and retirement planning

The Ritcey Report

July 13, 2017

Life expectancy in Canada is going through the roof. According to the Society of Actuaries, we live in an era where many couples expect to retire around 60 and there’s an 18% chance of at least one member of that couple living to 95 or beyond.

It wasn’t that long ago when financial planners based projections on the premise that a couple’s money had to be capable of supporting a 30-year retirement. That may have been true when people worked until 65 and very few lived past 95. That’s no longer the case.

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Another nice deal! Bonus: commissary & car wash

Canadian and U.S. morning comments

July 11, 2017

ATD.B signed an agreement to purchase privately owned Holiday Station stores with 522 stores in the Midwest U.S. This an interesting acquisition providing ATD.B with significant synergies that go well beyond incremental cash flow related to acquired EBITDA of $180M-$190M. Holiday operates a food commissary that produces fresh and frozen food for the entire network, and operates 221 car washes. Holiday extends ATD.B presence in 10 states and sees a move to 6 new markets. Store base is highly productive with enviable locations, difficult to replicate. Car washes and food commissary provide strategic advantage. Thus we see as a solid strategic move for ATD.B. Beyond the usual targeted synergies of purchasing and admin, we see long-term (L/T) significant revenue synergies as ATD.B exploits the commissary / food service and car wash expertise. Striking this deal hot on the heels of the CST closing speaks to the beauty of the decentralized model which will permit integration by different teams. Balance sheet (B/S) discipline will come to play as this deal closes in Q4/F18 when ATD.b will be well on the path of deleveraging from CST deal, making timing key.

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