CORPUS CHRISTI, Texas -- Susser Holdings Corp. has completed the acquisition of TCFS Holdings, Inc., the parent company of San Angelo, Texas-based Town & Country Food Stores Inc., in an all-cash transaction valued at approximately $359 million, plus payment of a $6 million tax benefit.
"With the acquisition of Town & Country complete, Susser Holdings is now one of the largest convenience store operators in the Southwest, with more than 500 stores centered in some of the most rapidly growing markets in the country," said Sam L. Susser, president [image-nocss] and CEO of Susser Holdings, Corpus Christi, Texas. "This combination gives us greater scale, expands our footprint from South Texas and Oklahoma into West Texas and Eastern New Mexico, giving us more geographic diversity, and it also provides additional fill-in growth opportunities in these new markets."
He added, "Town & Country is a highly profitable, well-run company, with quality store assets and many excellent people whom we are very pleased to welcome to the Susser organization. We anticipate that the process of integrating the two companies will be very straightforward. The Town & Country sites are expected to be re-branded to Stripes beginning in the second half of 2008."
As previously announced, Alvin New, the former CEO of Town & Country, is staying on as executive vice president at Susser Holdings and as president and CEO of Susser's retail operations. Devin Bates, the former CFO and chief information officer of Town & Country, is staying on as senior vice president and chief information officer at Susser Holdings.
In connection with the acquisition, Susser issued through a private placement $150 million aggregate principal amount of 10-5/8% Senior Notes due 2013, priced at 102.5% of principal amount plus accrued interest from June 15, 2007. Also in connection with the acquisition, Susser has entered into a new senior secured term loan facility of $105 million, which will be secured primarily by Town & Country's real estate. Initial pricing on the term loan is LIBOR plus 250 basis points. It has entered into a new $90 million senior secured revolving credit facility, replacing the existing $50 million facility. And it has executed a sale/leaseback agreement with National Retail Properties LP on 13 Town & Country locations for net proceeds of approximately $51 million.
All Town & Country indebtedness was extinguished at closing. Susser now has total debt outstanding of $390 million, approximately $11 million of which was funded under the new revolving credit facility. The company expects to have approximately $50 million of remaining borrowing capacity under the new revolving credit facility after giving effect to $28.4 million in outstanding standby letters of credit following the transaction.
Susser Holdings is a third-generation, family-led business that operates more than 500 convenience stores in Texas, New Mexico and Oklahoma under the Stripes, Town & Country and Village Market banners. Restaurant service is available in more than 270 of its stores, primarily under the proprietary Laredo Taco Co. and Country Cookin' brands. The company also supplies branded motor fuel to more than 375 independent dealers through its wholesale fuel division.
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