Pantry Completes Speedmart Acquisition

Units to keep current brand for time being

Published in CSP Daily News

SANFORD, N.C. -- The Pantry Inc. has announced that it has completed the acquisition of 13 convenience stores in Alabama from Chatham Oil Co. Inc., which has been operating the stores under the Speedmart Food Stores banner.

The deal was announced in early August. Terms of the transaction were not disclosed.

The acquisition expands The Pantry's presence in Alabama to 38 stores, and it is expected to be immediately accretive to the company's earnings per share. The acquisition was financed with cash on hand and seller lease financing.[image-nocss]

As reported in CSP Daily News, the stores will continue to be operated under the Speedmart Food Stores banner until the Pantry has a chance to reconcile the purchase with other stores in the Alabama market, a relatively new market for the retailer, first entered earlier this year with the purchase of the Cowboys chain from D&D Oil Co. in April.

We are pleased to announce this acquisition, which strengthens our position in Alabama by adding stores that will complement the existing 25 stores we currently operate in that market, said Peter J. Sodini, president and CEO of The Pantry, when the deal was announced. This transaction is consistent with our tuck-in acquisition strategy, which is focused on adding stores that enhance our market presence. Further, we expect the addition of these units to be immediately accretive to our earnings per share.

The Pantry Inc., Sanford, N.C., is one of the largest independently operated convenience store chains in the country, with net sales for fiscal 2004 of approximately $3.5 billion. As of June 30, 2005, the company operated 1,386 stores in eleven states under a number of banners, including Kangaroo Express, The Pantry, Golden Gallon, Cowboys and Lil Champ Food Store.