Company News

Pantry-Herndon Update

Regional retailer completes acquisition of 38 c-stores under Flamingo, other banners
SANFORD, N.C. -- The Pantry Inc. said yesterday that it has completed the previously announced acquisition of 38 convenience stores and travel centers from Abbeville, Ala.-based Herndon Oil Corp. The stores operate under a variety of banners, including Flamingo, and are located mainly in the Mobile, Ala., market, with the remainder in Florida, Mississippi and Louisiana.

Of the 38 stores, 31 are in Alabama, six are in Florida, one is in Louisiana and one is in Mississippi. Of the 40 stores included when the acquisition was first announced, one has since been closed and another [image-nocss] was subsequently removed from the transaction. The 38 acquired stores generated revenues of approximately $152 million for the 12 months ended May 2009.

Click hereto view the June 2009 CSP magazine cover story on The Pantry and its chairman and CEO, Pete Sodini.Click here for a CSPTV video tour of the chain's latest store design and an interview with Brad Williams, The Pantry's senior vice president of field operations. Andclick here for previous CSP Daily News coverage of The Pantry.The acquisition, which is expected to be accretive to the company's earnings per share in fiscal 2010, was funded with cash on hand. Terms were not disclosed.

"This acquisition fills a gap in our existing store base and represents our initial entry into the attractive Mobile market," said Sodini said when the deal was announced. "We expect this transaction to be accretive to our earnings per share in the first 12 months after closing."

Herndon Oil will continue to operate its remaining c-store assets located in the Dothan, Ala., area.

Richmond, Va.-based Matrix Capital Markets Group Inc. provided merger and acquisition advisory services to Herndon Oil, which included valuation advisory, asset marketing through a structured sale process and negotiation of the transaction.

Headquartered in Sanford, N.C., The Pantry is the leading independently operated c-store chain in the southeastern United States and one of the largest independently operated c-store chains in the country. As of June 25, 2009, the company operated 1,679 stores in 11 states under select banners, including Kangaroo Express, its primary operating banner. The Pantry's stores offer a broad selection of merchandise, as well as gasoline and other ancillary services designed to appeal to the convenience needs of its customers.

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