Pantry Completes Presto Acquisition

Deal for 47 c-stores brings retailer to Kansas, Missouri

CARY, N.C. -- The Pantry Inc. has announced that it has completed the previously disclosed acquisition of 47 convenience stores from Andover, Kansas-based Presto Convenience Stores LLC. The stores operate under the Presto tradename and are located mostly in Kansas, with three stores in Missouri.

The 47 acquired stores generated revenues of approximately $194 million for the 12 months ended May 2010.

The acquisition is expected to be accretive to the company's earnings per share in fiscal 2011, and it was funded with cash on hand. The acquisition includes the real [image-nocss] estate underlying 36 of the stores. Terms were not disclosed.

"This acquisition expands our geographic footprint and creates new fill-in opportunities for future growth," The Pantry CEO Terrance Marks said when the deal was announced in early September, noting that the purchase marks the retailer's entry into the Midwest in Kansas and Missouri.

(Click here for previous CSP Daily News coverage of the acquisition.)

The acquisition also includes a wholesale fuels business and ethanol blending operation.

Presto stores measure an average of 2,800 square feet and have four multi-pump dispensers, although The Pantry prefers more room for its new stores--3,300 square feet to 3,500 square feet. Two-thirds of the Presto stores sell Phillips-branded gasoline, while the rest pump its private brand. This represents a significant shift from just three years ago, when the company was 100% branded through refiner ConocoPhillips. And 13 of the Presto stores have car washes.

Headquartered in Cary, N.C., The Pantry is a leading independently operated convenience store chain in the southeastern United States and one of the largest independently operated c-store chains in the country. As of December 1, 2010, the company operated 1,623 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.