The purchase price of $73 million is predicated on approximately $50 million in assets, to be determined at time of closing. No debt is being assumed in this transaction. Core-Mark expects to fund the transaction from a [image-nocss] combination of cash and borrowings under its $200 million revolving credit facility. The deal is expected to close within two months and is expected to be accretive beginning in 2011, excluding approximately $2.5 million in startup and conversion costs.
FCGC is a leading wholesale distributors in the region servicing customers in Arkansas, Mississippi, Tennessee and surrounding states, serving approximately 1,500 retailers from a modern facility in Forrest City, Ark.
"The owners, management and employees of Forrest City have built a terrific business through hard work and dedication to their customers. We believe that Core-Mark will provide the platform for the Forrest City team to continue to grow and expand, complementing the strengths of this widely respected distribution company. Our objective is to provide additional marketing programs and support to add even more customer value to the Forrest City offering," said Michael Walsh, president and CEO of Core-Mark.
The company has a legacy that spans over 100 years. "In 2011, our company reached a significant milestone, passing the century mark for continuous years of operation," said Allen Cohn, vice president of FCGC. "FCGC's keys to success have always been the strong partnerships we have with customers, the dedication of our employees and the support of our community. During this process, it was obvious that Core-Mark would be a great fit with our organization, leveraging their strength in sales and marketing along with a decentralized culture to provide our customers a bright future."
Core-Mark raised its annual sales guidance to $8 billion for 2011, including expected sales upon closing of the FCGC acquisition. Management reiterated its estimated capital expenditures of $24 million in 2011.
Core-Mark is one of the largest marketers of fresh and broad-line supply solutions to the convenience retail industry in North America. Founded in 1888, it offers a full range of products, marketing programs and technology solutions to approximately 26,000 customer locations in the United States and Canada through 24 distribution centers (excluding two distribution facilities the company operates as a third-party logistics provider). Core-Mark services traditional convenience retailers, grocers, drug, liquor and specialty stores and other stores that carry convenience products.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.