7-Eleven Canada acquires Wallace & Carey assets in B.C. and Alberta
Five months after Wallace & Carey filed for creditor protection, 7-Eleven Canada today announced a new deal whereby the convenience giant is acquiring select assets of the Calgary-based food distributor.
According to a release: “7-Eleven has also agreed to provide a transition service agreement to purchase exclusively from W&C, acquire lease facilities and has provided W&C with working capital to support its return to a stable operating position across Canada. This transaction, which closed today, will ensure an important supply link to businesses and communities across the region is maintained.”
The century-old family-owned business is one of Canada's largest independent distribution firms. In June, Wallace & Carey Inc. and its parent company, Carey Management Inc., filed for creditor protection under CCAA, citing “existential challenges” related to the COVID-19 pandemic, labour shortages and the decline in tobacco sales.
The news shook the convenience channel. The Calgary-based company counts among its 7,000 customers convenience stores across Canada, including 7-Eleven and then-Greenergy.
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At the time of filing, Wallace & Carey had a fleet of 120 leased trucks and trailers, and leased warehouses in nine cities across B.C., Alberta, Manitoba, Saskatchewan and Ontario. It also employed about 650 and was celebrated as critical supplier to some of Canada’s most remote communities. (In addition, Wallace & Carey owns Loudon Bros. Ltd., a distributor servicing Northwestern Ontario, which has 500 customers, including Lactalis Canada Inc. and Labatt Brewing Co. Ltd.)
The assets included in today’s announcement from 7-Eleven are in British Columbia and Alberta. It is not clear what is to happen with the other parts of the business.
"This transaction positions 7-Eleven well for continued growth in Canada, strengthening our already robust business in the country, and bringing with it a range of long-term benefits for our stores by stabilizing our supply chain," says Marc Goodman, vice-president and general manager of 7-Eleven Canada. "We feel confident that this acquisition will bring the maximum quality of service to our stores so that we can continue to serve our customers at the highest level."
When Wallace & Carey filed for creditor protection, there were reports of empty shelves as some suppliers cut off shipments and credit, while others insisted on cash upon delivery. While operators, including 7-Eleven scrambled to source product, Wallace & Carey moved to negotiate with creditors and committed “to operate in normal course while it restructures.”
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"7-Eleven is a long-standing customer of Wallace & Carey and we're excited to further strengthen our partnership," CEO Pat Carey, the third generation Carey to lead the business, said in today's release. "Wallace & Carey will continue its day-to-day operations as usual, and we expect to emerge from this process better positioned for the future."
