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Core-Mark Holding (CORE) To Buy Convenience Wholesaler J.T. Davenport & Sons

 December 10, 2012 10:43 AM

(By Balaseshan) Core-Mark Holding Co. Inc. (NASDAQ: CORE), a marketer of fresh and supply services to the convenience retail industry, said it has agreed to buy convenience wholesaler J.T. Davenport & Sons Inc. located in Sanford, North Carolina.

The purchase price is estimated to be about $45 million, predicated on the value of certain assets and liabilities to be determined at closing. No debt is being assumed in this transaction.

Core-Mark will fund this purchase with a combination of cash on hand and borrowings under its $200 million revolving credit facility.

The deal is expected to be accretive in 2013, excluding about $2.5 million in start-up and conversion costs, a portion of which will be incurred in 2012.

[Related -Dividend Scan: CORE, SCL, SVU, WCN, BGS, EBTC, VISA, DNB]

The transaction is structured as an all-cash stock acquisition pursuant to which Davenport will become an indirect subsidiary of Core-Mark. Davenport was ranked as the 15th largest convenience wholesaler by Convenience Store News, with 2011 revenues reaching about $600 million.

Davenport engages in the wholesale distribution of convenience groceries, candies, tobacco, food service products, health and beauty products, and general merchandise.

Davenport established its presence in Sanford, North Carolina in 1917, the company services customers in eight states and presently employs about 340 people, servicing about 2,000 convenience stores. The deal is expected to close by the end of 2012.

[Related -Sector Scan: Food Retailers And Wholesalers, And Tires Sectors Rise, Airlines Industry Loses]

Founded in 1888, Core-Mark offers a full range of products, marketing programs and technology solutions to about 29,000 customer locations in the U.S. and Canada through 27 distribution centers (excluding two distribution facilities the company operates as a third party logistics provider).

CORE is trading down 0.39% at $47.06 on Monday. The stock has been trading between $34.78 and $50.56 for the past 52 weeks.



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