Sun Rises in the South

Published in CSP Daily News

Are the Carolinas on Sun Capital's mind?

By  CSP Staff,

OAK BROOK, Ill. -- Sources suggest a rising star in the convenience-store business is brewing up a significant transaction in the Carolinas, rumored to involve more than 100 stores. Such consolidation would likely affect the competitive landscape for retailers in both North Carolina and its southern sister state, sources told CSP Daily News.

A large chain reportedly is in the process of selling its assets to a firm sources have identified as Sun Capital Partners Inc., the Boca Raton, Fla.-based investment firm that in September 2006 snatched up Indianapolis-based Marsh Supermarkets and [image-nocss] its c-store subsidiary, Village Pantry. In June 2007, Sun Capital announced it would make Village Pantry—which a spokesperson later referred to as "a wonderful business"—its own business unit, separate from its supermarket parent.

Sun Capital, which has investments in various sectors such as fast-casual restaurants and women's apparel stores, had expressed an interest in acquiring more c-stores in the wake of the Marsh transaction. In October 2007, its Village Pantry arm purchased more than 30 Next Door Store locations in Michigan from Imperial Co. Inc., Mount Pleasant, Mich. ( Click here to read CSP's December 2007 report on Sun Capital and Village Pantry.)

One source, who requested anonymity because he does business in the Carolinas, said he has seen an accelerating rate of consolidation in the two states over the past 12 months. The source suspected that fuel-price volatility and an already consolidated market—driven by the likes of The Pantry Inc., Sanford, N.C.—may be making the Carolinas an attractive lure for investors because consolidated markets tend to produce favorable margins.