Couche-Tard buys Pantry for $1.7 billion

Cary, N.C. – Canadian convenience store conglomerate Alimentation Couche-Tard Inc., which operates stores under the Circle K banner in the U.S., has agreed to purchase The Pantry Inc., operator of the Kangaroo Express convenience/fuel chain, for $1.7 billion. Purchase price includes $861 million in cash and about $840 million in assumed debt.



The cash portion of the transaction values Pantry stock at $36.75 per share. This represents a premium of 27% to The Pantry's closing share price on Dec. 16, 2014, the last trading day prior to public media reports that The Pantry was exploring a potential transaction.



The acquisition will add more than 1,500 stores to the Couche-Tard network of about 6,300 North American stores, concentrated in the Southeastern and Gulf Coast regions of the U.S.

The transaction is expected to close in the first half of 2015, subject to the approval of The Pantry shareholders and customary regulatory approvals. The transaction includes customary breakup fees. The transaction is expected to be financed by Couche-Tard's available cash, existing credit facilities and a new term loan.



Faegre Baker Daniels LLP is acting as exclusive legal advisor to Alimentation Couche-Tard. BofA Merrill Lynch is acting as exclusive financial advisor to The Pantry. Willkie Farr & Gallagher LLP and Smith Anderson are acting as legal advisors to The Pantry.