Alimentation Couche-Tard Inc. and The Pantry Inc. announced on Thursday they have reached a definitive merger agreement under which Couche-Tard will buy The Pantry in an all-cash transaction.
Couche-Tard will buy Pantry shares at $36.75 each, in a deal totaling $1.7 billion including debt assumed.
The Boards of Directors of both companies unanimously approved the agreement.
The agreed transaction price represents a 27% premium to The Pantry’s closing share price on December 16th, 2014.
The acquisition is expected to be completed in the first half of 2015, subject to customary regulatory and The Pantry shareholders’ approval.
Couche-Tard says it plans to carry out the transaction with its available cash, existing cash facilities and a new term loan.
Couche-Tard’s exclusive legal advisor is Faegre Baker Daniels LLP. The Pantry’s financial advisor is BoA Merrill Lynch, and its legal advisors are Willkie Farr & Gallagher LLP and Smith Anderson.
Alimentation Couche-Tard Inc. is Canada’s leading convenience store chain, while in the US it is the biggest independent convenience store operator in terms of number of company-operated stores. It also has extensive operations in Europe.
Couche-Tard wants to increase its presence in the Gulf Coast and Southeastern regions of the US.
The Pantry Inc. is headquartered in Cary, North Carolina. It is one of the leading independently-operated convenience store chains in the southeastern US, and one of the biggest independently-operated convenience store chains nationally.
Couche-Tard’s President and Chief Executive Officer, Brian P. Hannasch, said:
“We look forward to welcoming The Pantry, Inc. to the Couche-Tard family. The Pantry is an excellent company and is well positioned in the Southeastern and Gulf Coast regions of the U.S., two of the fastest growing areas of the U.S. With this transaction we will add more than 1,500 stores to our network which will position us as the definitive leader in this region and will reinforce our position as one of the largest convenience store operators in North America.”
“We look forward to combining the capabilities of The Pantry team with Couche-Tard to enhance value for our shareholders. We strongly believe that our all-cash offer is compelling for The Pantry’s shareholders as it offers them the opportunity to realize full and immediate value for their investment.”
Dennis G. Hatchell, President and CEO of The Pantry, Inc. said:
“I am very proud of The Pantryemployees and what they have accomplished. The company’s current performance is a direct result of the employees’ hard work and effort. Their work has clearly been recognized by the marketplace and by Couche-Tard, culminating in this transaction.”
“This is an exciting combination of two strong companies that complement each other extremely well. Unlocking the strategic value of these combined firms will benefit the current Pantry shareholders and provide ongoing opportunities for most of our employees. I sincerely thank and appreciate each of the employees for their contributions to the success of this organization.”