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DALLAS - Fleming today said it is acquiring privately-held companies Core-Mark International Inc. and Head Distributing, two of the nation's foremost convenience-store distributors.
The Head Distributing acquisition closed on April 23, and Fleming expects the Core-Mark acquisition to close within 90 days, subject to certain closing conditions, according to the company. The combined purchase price of these two acquisitions is expected to be approximately $430 million, which includes the payment of cash and assumption of debt of these two companies.
Core-Mark, a leading piece-pick distributor to convenience stores and other retail customers in western North America, had 2001 sales of $3.4 billion. It serves nearly 30,000 locations from its network of 19 distribution centers. Current Core-Mark customers include Circle K, Phillips Petroleum, ARCO AM-PM, EZ Mart, Chevron and Shell dealers, 7-11 franchisees, Long's Drug Stores, Albertson's, and Safeway.
Head Distributing, a Georgia-based distributor, operates two piece-pick distribution centers and serves 3,000 retail locations in six southeastern states. Head Distributing's fiscal 2001 sales were approximately $350 million. Head's largest customer is Ahold's convenience operations.
As a result of the acquisitions, Fleming will have a nationwide network of high-velocity piece-pick distribution centers that will serve approximately one out of every five of the convenience store outlets in the United States, along with many other retail customers.
"These acquisitions benefit all of Fleming's stakeholders," said Mark Hansen, Fleming's chairman and CEO. "Our shareholders will be clear beneficiaries of Fleming's expanded sales and the increased earnings we anticipate from these acquisitions. Our customers will be advantaged as we continue to drive costs out of the supply chain through the benefits of size and scale. Consolidating $22 billion of annualized wholesale volume into one company and serving nearly 50,000 retail locations is of tremendous value to vendors. Fleming associates, including the outstanding teams who will be joining us from Core-Mark and Head Distributing, will benefit as we continue to grow our enterprise and execute our winning business model."