Snyder's owns and operates 81 corporate stores and supports more than 100 independent retailers in Iowa, Illinois, Michigan, Minnesota, Montana, South Dakota and Wisconsin under the Snyder's name through its distribution center in Eagan, MN. Drug Emporium owns and operates 77 stores under the names Drug Emporium, F&M Super Drug Stores and Vix Drug Stores. The company also franchises additional stores under the Drug Emporium name.
Snyder's plans to pay $21 million in cash and assume certain liabilities. Under the plan, no distribution will be made to current shareholders of Powell, OH-based Drug Emporium, and all of its existing shares will be canceled.
The plan will go into effect upon the completion of the documentation required by the plan and the closing of a $160-million revolving loan facility and a $40-million term loan facility. Snyder's and Drug Emporium have received commitments for both. The money will be used to get Drug Emporium through the reorganization process and provide working capital for both Drug Emporium and Snyder's.
In addition, a major supplier of pharmaceutical goods to both companies has agreed to provide $40 million in credit enhancements to the new loan facilities as well as enter into a long-term supply agreement with the new combined company.
Snyder's will operate Drug Emporium as a separate wholly-owned subsidiary. The transaction is expected to close in September.
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