"The acquisition of Core-Mark continues our drive to amass scale in an industry that benefits greatly from size," Mark Hansen, Fleming chairman and CEO, said in a prepared statement.
Core-Mark and Head Distributing are just the latest in a series of buys in the past year to reposition Fleming as leader of the price-impact trade as it backs away from conventional supermarkets. In the company's first-quarter conference call, it was said that another $100 million would be laid on the line for 2002 acquisitions. In the last 12 months, about 100 traditional supermarkets were sold to advance the strategy. Fleming is operating 130 price-impact stores under the Yes!Less, Foods4Less and Rainbow Foods brands.
The Core-Mark closing coincided with Fleming's completion of a $200-million offering of 9.25% senior notes due 2010, eight million shares of common stock and 1.2-million shares exercised by underwriters under their over-allotment option. In line with the positioning, Fleming lined up a new $975-million bank credit facility, of which $550 million is a revolving line. There are no debt maturities until 2007.
Core-Mark's stronghold on the western US precipitated the takeover. The company's includes 19 distribution centers and 30,000 top-branded convenience stores. It had 2001 sales of $3.4 billion.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.