SOUTH SAN FRANCISCO, Calif. -- Core-Mark Holding Co. Inc.--one of the largest marketers of fresh and broad-line supply solutions to the convenience retail industry in North America--has announced that it has signed a definitive stock purchase agreement to acquire J.T. Davenport & Sons Inc., Sanford, N.C., for an estimated $45 million.
Davenport is among the largest convenience wholesalers, with 2011 revenues of more than $600 million. A leading independent wholesale distributor in the Southeast, it serves more than 2,000 convenience stores.
The transaction is structured as an all-cash stock acquisition pursuant to which Davenport will become a wholly owned, indirect subsidiary of Core-Mark.
The purchase price is predicated on the value of certain assets and liabilities to be determined at closing. Core-Mark is assuming no debt in this transaction. Core-Mark will fund this purchase with a combination of cash on hand and borrowings under its $200 million revolving credit facility.
The deal is expected to close by the end of 2012 and is expected to be accretive in 2013, excluding approximately $2.5 million in startup and conversion costs, a portion of which will be incurred in 2012.
"We are extremely pleased to welcome Mark Davenport and his company to the Core-Mark family. For decades, J.T. Davenport has built a well-deserved reputation as a top-tier distributor in the industry. I look forward to Mark's leadership in creating customer solutions by combining J.T. Davenport's best practices and market presence with Core-Mark's marketing strategies and technology. Our shared cultures, values and focus on customer needs make this business combination a great fit," said J. Michael Walsh, president and CEO of Core-Mark.
"In 2012 our company will have reached its 95th successful year of operation by placing value in building strong partnerships with our customers, the dedication of our employees and the support of our supplier community. As the industry has grown and changed over time, Davenport changed with those demands but always stayed consistent with our values. In Core-Mark we see the same vision and dedication necessary to continue servicing our customers' needs," said Mark Davenport, president of Davenport. "Core-Mark's decentralized platform will allow Davenport's customers and employees greater opportunity to meet the unique challenges we face at the local level while enjoying the leverage and support of being a national supplier. The Davenport management team and I are looking forward to the opportunity this provides us in bringing new and exciting programs to our customers, helping them grow their sales and profits."
J.T. Davenport engages in the wholesale distribution of convenience groceries, candies, tobacco, foodservice products, health and beauty products and general merchandise. Established in 1917, the company services customers in eight states and presently employs approximately 340 people.
Founded in 1888, South San Francisco, Calif.-based Core-Mark offers a full range of products, marketing programs and technology solutions to approximately 29,000 customer locations in the United States and Canada through 27 distribution centers (excluding two distribution facilities the Company operates as a third party logistics provider). Core-Mark services traditional convenience retailers, grocers, drug, liquor and specialty stores and other stores that carry convenience products.