GOODLETTSVILLE, Tenn. -- Dollar General Corp. said that it has entered into an agreement to be acquired by affiliates of Kohlberg Kravis Roberts & Co. LP (KKR) in a transaction with a total value of approximately $7.3 billion, including approximately $380 million of net debt.
Under the terms of the agreement, Dollar General shareholders will receive $22 in cash for each share of Dollar General common stock they hold, representing a premium of approximately 31% over Dollar General's closing share price of $16.78 on March 9, 2007, and a premium of [image-nocss] approximately 29% over the average closing share price during the previous 30 trading days.
"[The] transactionprovides excellent value for our shareholders, representing a significant premium and the certainty of cash," said David A. Perdue, chairman and CEO of Dollar General. "Our boardfirmly believes that this is the right transaction for our shareholders, employees and customers. Going forward, employees will benefit from the continuity of a solid business plan and new investments in the future of the business. Our customers will continue to enjoy the convenience, value and great service that they've come to expect from Dollar General over our proud 68-year history."
Michael M. Calbert, a member of KKR, said, "Dollar General is an outstanding company with a strong market presence and a rich legacy. We have worked closely with many retail companies in driving success and unlocking value, and we look forward to partnering with the Dollar General team to position the company for future growth."
The merger is subject to the approval of Dollar General shareholders, customary closing conditions and regulatory approvals. The transaction is expected to close in third-quarter 2007. The Dollar General board unanimously approved the merger agreement and has recommended that Dollar General shareholders vote in favor of the transaction. Debt financing for the transaction has been committed by Goldman Sachs and Lehman Brothers, subject to customary terms and conditions. Lazard and Lehman Brothers are financial advisors to Dollar General and Wachtell, Lipton, Rosen & Katz is its legal counsel. Goldman Sachs is acting as financial advisor to KKR. Simpson Thacher & Bartlett LLP is acting as legal advisor to KKR.
Goodlettsville, Tenn.-based Dollar General is a discount retailer with 8,260 neighborhood dollar stores as of March 2, 2007. The stores offer consumable basic items that are frequently used and replenished, such as food, snacks, health and beauty aids and cleaning supplies, as well as a selection of basic apparel, housewares and seasonal items.
KKR, New York, is a private-equity firm specializing in management buyouts. Over the past 30 years, KKR has invested in 14 transactions in the retail sector in North America and Europe, representing $25.5 billion of aggregate value and covering a variety of channels including supermarkets, consumer drugstores and specialty retail. In total, since its founding, KKR has completed approximately 150 transactions with an aggregate value of nearly $280 billion.
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