CORPUS CHRISTI, Texas -- Having built and opened 14 new Stripes convenience stores in 2010 and 17 so far in 2011, Susser Holdings Corp. will nearly double its new-store growth, as reported in CSP Daily News earlier this week.
To that end, Susser Holdings said yesterday that it has priced a public offering of 3.5 million shares of its common stock at a public offer price of $21.75 per share.
In addition, the underwriters have been granted a 30-day option to purchase up to an additional 525,000 shares of common stock from Susser. It said that it intends to use the net proceeds from this offering for growth capital for new-store development and general corporate purposes, which may include opportunistic debt reduction, based on market conditions.
The closing of the offering is expected to take place on December 7, 2011.
A filing with the U.S. Securities & Exchange Commission (SEC) offers more detail into how and where the public company plans to grow.
"Our strategy is to continue to increase sales and profitability through the successful implementation of our operating plan, which includes growing our retail and wholesale operations in existing and contiguous markets," stated the filing obtained by CSP Daily News.
The 29-page document breaks Susser's strategy into four specific elements:
Expand Retail & Wholesale Operations
The company, which went public with an initial offering of stock in late 2006, opened or acquired 253 new retail stores and added 195 new dealer locations, on a gross basis, from January 2006 through Oct. 2, 2011.
In its SEC filing, the company stated that it plans to "further accelerate new store growth with 25 to 30 store openings in 2012. We will continue to invest in our existing landbank of approximately 30 sites, which we will partly utilize to accelerate new store growth. We also plan to continue to increase our wholesale distribution operations by 25 to 35 dealer locations per year."
To do this, the company will "focus our growth on existing and contiguous markets where demographics and overall market characteristics are similar to our markets."
Expand & Enhance Proprietary Restaurant Offering
Noting that its Laredo Taco Co. proprietary foodservice offering is currently located in 309 of the chain's 539 stores, Susser stated, "We believe this foodservice offering gives us a valuable competitive advantage that differentiates us from other convenience stores. ... Going forward, we plan to continue to open Laredo Taco Co. restaurants in most new Stripes stores.
Continue to Enhance the Operating Performance of Stores
"We believe we are well-positioned to continue to grow our merchandise same-store sales by increasing our brand awareness and loyalty, and providing a convenient shopping experience in a clean setting offering proprietary foodservice and private-label products," the SEC document stated. "In addition to improving same-store sales, we continue to realize market-share gains, and we believe our favorable retail mix positions us for future margin growth in the long term."
Pursue Acquisitions in Existing & Contiguous Markets
Susser Holdings has completed 13 "significant acquisitions" in the last 23 years, the document notes, adding that the company's "unique retail/wholesale business model provides us with strategic flexibility to acquire chains with both retail and wholesale dealer locations."
In the future, Susser plans to "selectively pursue acquisition opportunities" within the convenience store industry. "We will focus on existing and contiguous markets where demographics and overall market characteristics are similar to our existing markets," the company states in the SEC document. "With approximately 20,000 convenience stores operating in Texas, Louisiana, New Mexico and Oklahoma, we believe there are significant opportunities to further penetrate our existing markets and selectively expand into new contiguous markets.
"This region has been under intense competitive pressure from hypermarkets and other supermarket operators, making the region ripe for continued consolidation as weaker competitors exit the business. In addition, greater merchandise and fuel purchasing scale benefits, as well as improvements in technology, provide an added incentive for consolidation of smaller competitors than in the past.
Corpus Christi, Texas-based Susser Holdings Corp. is a third-generation, family-led business with approximately 1,100 convenience stores in its network. The company salary-operates 539 convenience stores in Texas, New Mexico and Oklahoma under the Stripes banner.
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