Core-Mark To Acquire Forrest City Grocery

“We believe that Core-Mark will provide the platform for the Forrest City team to continue to grow and expand,” says Core-Mark CEO.

Core-Mark Holding Co. Inc., a marketer of fresh and broad-line supply solutions to the convenience retail industry in North America, has signed a definitive agreement to acquire Forrest City Grocery Co. (FCGC), for approximately $73 million.

The transaction is structured as an all-cash merger pursuant to which FCGC will become a wholly-owned, indirect subsidiary of Core-Mark.

The purchase price of $73 million is predicated on approximately $50 million in assets, to be determined at time of closing.  No debt is being assumed in this transaction. Core-Mark expects to fund the transaction from a combination of cash and borrowings under its $200 million revolving credit facility.  The deal is expected to close within two months and is expected to be accretive beginning in 2011, excluding approximately $2.5 million in start-up and conversion costs.

FCGC is a wholesale distributor in the region, servicing customers in Arkansas, Mississippi, Tennessee and surrounding states.  A commitment to bringing value to their customers has resonated with the 1,500 retailers they serve from a modern facility in Forrest City, Ark.  The company has a legacy that spans over 100 years and along the way, they have developed a strong history for growing sales and profits.

“The owners, management and employees of Forrest City have built a terrific business through hard work and dedication to their customers. We believe that Core-Mark will provide the platform for the Forrest City team to continue to grow and expand, complementing the strengths of this widely respected distribution company.  Our objective is to provide additional marketing programs and support to add even more customer value to the Forrest City offering,” said Michael Walsh, president and CEO of Core-Mark.

“In 2011 our company reached a significant milestone, passing the century mark for continuous years of operation. FCGC’s keys to success have always been the strong partnerships we have with customers, the dedication of our employees and the support of our community,” said Allen Cohn, vice president of FCGC. “During this process it was obvious that Core-Mark would be a great fit with our organization, leveraging their strength in sales and marketing along with a decentralized culture to provide our customers a bright future.”

The Company raises its annual sales guidance to $8.0 billion for 2011, including expected sales upon closing of its Forrest City Grocery Company (FCGC) acquisition. Management reiterates its estimated capital expenditures of $24 million in 2011.

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