Alimentation Couche-Tard Inc. and The Pantry Inc. have announced a definitive merger agreement under which Couche-Tard will acquire The Pantry in an all-cash transaction valued at $36.75 USD per share, with a total enterprise value of approximately $1.7 billion USD, including debt assumed.
The terms of the agreement were unanimously approved by the Boards of Directors of both companies.
The transaction price represents a premium of 27% to The Pantry’s closing share price on Dec. 16, 2014, the last trading day prior to public media reports that The Pantry Inc. was exploring a potential transaction, and a premium of 39% to the 30-day average share price ending on Dec. 16, 2014.
“We look forward to welcoming The Pantry Inc. to the Couche-Tard family,” said Brian Hannasch, Couche-Tard’s president and CEO. “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.”
“I am very proud of The Pantry employees and what they have accomplished,” said Dennis Hatchell, president and CEO of The Pantry Inc. “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.”
The transaction is expected to close in the first half of 2015, subject to the approval of The Pantry shareholders and customary regulatory approvals. The transaction includes customary breakup fees. This all-cash transaction is expected to be financed by Couche-Tard’s available cash, existing credit facilities and a new term loan.
Faegre Baker Daniels LLP is acting as exclusive legal advisor to Alimentation Couche-Tard Inc. BofA Merrill Lynch is acting as exclusive financial advisor to The Pantry, Inc. Willkie Farr & Gallagher LLP and Smith Anderson are acting as legal advisors to The Pantry, Inc.
In connection with the proposed transaction, The Pantry intends to file a proxy statement and other relevant documents concerning the proposed transaction with the SEC.