The Pantry, an independently operated convenience store chain in the southeastern US, has signed a definitive agreement to acquire 66 Petro Express convenience stores in North Carolina and South Carolina.
The acquisition also includes the wholesale fuels business of Carolina Petroleum Distributors of Charlotte, which sells over 100 million gallons of fuel annually to more than 450 commercial customers.
Commenting on the acquisition, chairman and CEO Peter Sodini said: The addition of Petro Express, which has built a leading market position in the Charlotte area, complements our existing store base and is expected to be immediately accretive to our earnings per share. While we already operate 327 stores in North Carolina, we have not focused on Charlotte and our presence there to date has been nominal, partly because of Petro Express’s strength. This acquisition provides us with an excellent platform for future growth in one of the southeast’s most fundamentally attractive metropolitan areas.
Mr Sodini added: The Petro Express stores are mostly large, state-of-the-art facilities that generate the highest average revenues of any acquisition in The Pantry’s history. All but ten of the stores have car washes, for example, and their merchandise and service volumes are exceptionally strong with average store sales over 50% higher than the company’s stores. This transaction brings the total number of stores we have acquired or agreed to acquire so far in fiscal 2007 to 133.
The acquisition, which is subject to regulatory approvals and other customary closing conditions, is expected to close in the company’s third fiscal quarter.
The purchase price for the acquired assets, including a five-year non-compete agreement, is expected to be $275 million, plus inventory at cost. The Pantry plans to finance the transaction with a combination of available funds and lease financing.
Based in North Carolina, The Pantry recorded revenues for fiscal 2006 of approximately $6 billion. As of December 28, 2006, the company operated 1,506 stores in eleven states under select banners, including Kangaroo Express, its primary operating banner.