The Pantry (PTRY) to Acquire 40 Stores from Herndon Oil; Bought Back $26M in Outstanding Bonds During Q2
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The Pantry, Inc. (NASDAQ: PTRY) today announced that it has signed a definitive agreement to acquire 40 convenience stores. The Company also announced that, during the second fiscal quarter, it repurchased $26 million in principal amount of outstanding bonds.
The Company is acquiring the stores from Herndon Oil Corp. The acquisition, which will include the real estate underlying 32 of the 40 locations, is expected to be funded with cash on hand. Thirty-two of the stores are located in Mobile, Alabama and the surrounding Interstate-10 corridor; six are in Florida and the remaining two are in Mississippi and Louisiana. The stores operate under a variety of names, including the Flamingo banner, and generated revenues of approximately $189 million during the 12 months ended June, 2008. The acquisition, which is subject to regulatory approvals and other customary closing conditions, is expected to close in the second half of fiscal 2009.
Additionally, the Company reported that during the second fiscal quarter, it repurchased $26 million in principal amount of its outstanding bonds, consisting of $23 million of its 3.0% Senior Subordinated Convertible Notes and $3 million of its 7.75% Senior Subordinated Notes, for an aggregate purchase price of approximately $19 million. As a result, the Company will include a pre-tax gain of over $6 million on the extinguishment of debt in its financial results for the quarter, which will be reported in early May.
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