CORPUS CHRISTI, Texas -- In the four months since it closed on the purchase of 168 Town & Country stores in West Texas, Susser Holdings Corp. has had several pleasant surprises, not the least of which is the likelihood that the financial synergies generated by the deal will be more than twice what was originally expected.
“We 've raised our estimate of expected cost synergies from the Town & Country acquisition from about $2 million a year to a run rate of about $5 million,” president and CEO Samuel L. Susser (pictured) said on a conference call yesterday. “The $5 [image-nocss] million includes about $2 million of G&A savings and $3 million of procurement savings.”
He added later on the fourth-quarter 2007 earnings call with analysts, “We hope and expect there will be additional synergies that will be realized over time, and we 'll certainly be working to achieve that.”
For complete fourth-quarter and full-year results, see related story in this issue of CSP Daily News.
Meanwhile, Susser said the integration of Town & Country into the Susser Holdings fold “continues on track with our expectations.”
“Since the transaction closed, we 've initiated the process of consolidating information-technology platforms, finance, accounting and shared services,” he said. “We successfully renegotiated merchandise supply contracts with McLane and several of our other leading suppliers, under which we 've already begun to realize some cost savings.”
Regarding personnel, Susser said, “We are anticipating about 13 people relocating from [Town & Country in] West Texas to either Corpus Christi or Houston this summer.… We 're very excited about a lot of the key leaders out of Town & Country that are coming to join our management team and are going to be part of our long-term future.”
He added, however, that the integration process will “result in a number of job losses” due to the elimination of various duplicated services and positions. “There 's a painful element in that,” he said, “and that process is under way.”
He summarized, “Our past experience with integrating large acquisitions has taught us that melding two companies is never easy. But we see more long-term sales upside than we anticipated prior to closing.”
Following Susser's acquisition of Town & Country, the company now has 504 c-stores and 278 restaurants.
Corpus Christ, Texas-based Susser Holdings is a third-generation, family-led business with stores in Texas, New Mexico and Oklahoma under the Stripes, Town & Country and Village Market banners. Restaurant service is available 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.
To read more about Susser Holdings Corp. 's remarkable transformation for a five-store chain just 20 years ago, look for the March issue of CSP magazine.
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