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[IMGCAP(1)]CORPUS CHRISTI, TX-Susser Holdings Corp. has completed its acquisition of TCFS Holdings Inc., parent of San Angelo, TX-based Town & Country Food Stores Inc. The all-cash transaction was valued at $359 million plus a $6-million tax payment.

With the paperwork signed, Susser is now in the process of revising the combined companies’ capital budget for 2008, says Mary E. Sullivan, Susser’s executive vice president, CFO and treasurer. She explains that Town & Country acquired 13 sites for development throughout West Texas and Eastern New Mexico. Meanwhile, Susser has nine stores either under construction or under contract to acquire and four undeveloped sites primarily in South Texas.

[IMGCAP(2)]“We’re taking a look at prioritizing what we have and it wouldn’t surprise me if we start using some of those sites sometime next year,” Sullivan tells GlobeSt.com. “But, we don’t have the schedule yet.”

In the meantime, re-branding the Town & Country stores into Susser’s Stripes brand won’t begin until late 2008. The deal spanned 168 stores, but only 161 are ticketed for re-branding, according to the initial announcement. “The Town & Country brand is doing well. We don’t feel there’s a real rush to go in on Day One and re-brand,” Sullivan explains. “But, we will ultimately put everything under the Stripes brand.”

The other reason to wait, Sullivan continues, is due to increased leverage that Susser took on when it bought the Town & Country chain. “We want to work down that leverage before spending the capital,” she says.

Timing also is an issue, especially with spring and summer being heavy traveling seasons in West and South Texas. “We don’t want to disrupt summer traffic with re-branding,” Sullivan comments. “We want to take our time with this and do it thoughtfully.”

Sam L. Susser, president and CEO of the holding company, says the acquisitions catapults the firm into one of the largest convenience store operators in the Southwest “with more than 500 stores centered in some of the most rapidly growing markets in the country.” Town & Country’s CEO Alvin New has been named executive vice president of Susser Holdings and president and CEO of its retail operations. Town & Country’s former CFO and chief information officer Devin Bates becomes senior vice president and CIO for Susser Holdings.

In connection with the acquisition, Susser issued a private placement of $150 million of senior notes that mature in 2013; secured a senior-secured term loan of $105 million, primarily collateralized by Town & Country real estate; obtained a $90-million senior-secured revolving credit facility to replace an existing $50-million facility; and executed a $51-million sale-leaseback with National Retail Properties LP for 13 locations.

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