"This acquisition expands our geographic footprint and creates new fill-in opportunities for future growth," Marks said, noting that the purchase marks The Pantry's entrance into the Midwest in Kansas and Missouri.
Presto president Terry [image-nocss] Presta said he worked with Chicago-based NRC Realty & Capital Advisors LLC to place his company on the sales block and sell the sites. "We got a very solid offer from a great company, and decided to go ahead and take it," he told CSP Daily News.Presta said his company had been approached some time ago by a real-estate company in Israel with an unsolicited offer to purchase the company. While he decided not to take that first offer, that is when the company decided to contact NRC to put the stores on the market to see what might happen.Presta has signed a three-year agreement with The Pantry to stay on as a consultant to help integrate the company into the two new markets. The Pantry currently operates in Indiana, Kentucky, Tennessee, Virginia, North Carolina, South Carolina, Louisiana, Mississippi, Alabama, Georgia and Florida.
"I won't be operating the stores, but I will be working with them as far as the relationships that we have existing with Presto," Presta said.
The acquisition also includes a wholesale fuels business and ethanol blending operation, with which Presta will also assist. Presta has more than 30 years of experience in the convenience store industry and is a past president of ConocoPhillips national marketer advisory board. "I've really been impressed with The Pantry's thoroughness and management to this point," he said. "It was a really good deal and I'm excited about the transition."
The acquisition, as reported in a Morgan Keegan/CSP Daily News Flash yesterday, will include the real estate underlying 36 of the 47 locations and is expected to be funded with cash on hand. The stores generated revenues of approximately $194 million during the 12 months ended May 2010. Presto stores are concentrated in the Wichita market, with an additional four stores each in the Kansas City and Lawrence markets, and the balance located throughout western Kansas.
According to a release from NRC, Presto stores measure an average of 2,800 square feet and have four MPDs, though The Pantry prefers more room for its new stores3,300 square feet to 3,500 square feet. Of the company's 47 stores, two-thirds sell Phillips-branded gasoline while the rest pump Presto's private brand. This represents a significant shift from just three years ago, when the company was 100% branded through refiner ConocoPhillips. Thirteen Presto stores have car washes.
According to CSPedia, CSP's subscription-based resource, Andover, Kansas-based Presto had added sites as recently as 2009, but put expansion plans on hold in early 2010.
The acquisition, which is subject to regulatory approvals and other customary closing conditions, is expected to close in the first quarter of fiscal 2011.
In other Pantry news, the company announced the appointment of Mark R. Bierley as senior vice president and chief financial officer effective Sept. 27, 2010. Bierley will replace Frank G. Paci, who plans to resign from the company effective Sept. 26, 2010, to pursue other interests. Paci will provide transition consulting services to the company until Dec. 31, 2010.
"We are delighted to welcome Mark to The Pantry's management team," Marks said. "Mark brings broad professional experience and deep retail industry knowledge that will allow him to quickly add value as The Pantry's CFO."
Commenting on Paci's resignation, Marks stated: "We sincerely appreciate Frank's financial leadership during his tenure with The Pantry and wish him nothing but the best in his future endeavors. Frank has played an important role in The Pantry's success, and we are pleased that he will remain a consultant through the end of the year to help effect a smooth transition."
Bierley (pictured) joins The Pantry from Borders Group Inc., where he has been chief operating officer and CFO since June 2010. At Borders since 1996, Bierley progressed through a variety of financial management positions, including executive vice president and CFO from January 2009 through June 2010 and senior vice president of finance from 2003 through 2008. Prior to working with Borders, Bierley held positions in the financial departments for Dunham's Athleisure Corp., a Midwest sporting goods and apparel retain chain, and Federal-Mogul Corp., a global automotive parts manufacturer.
Headquartered in Cary, 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 Sept. 2, 2010, the company operated 1,639 stores in 11 states under select banners, including Kangaroo Express, its primary operating banner.
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