Core-Mark to Purchase J.T. Davenport & Sons
SOUTH SAN FRANCISCO, Calif. -- Core-Mark Holding Co. Inc. signed a Definitive Stock Purchase Agreement to acquire J.T. Davenport & Sons Inc. (Davenport) in Sanford, N.C. The transaction is structured as an all-cash stock acquisition, pursuant to which Davenport will become a wholly owned, indirect subsidiary of Core-Mark.
"We are extremely pleased to welcome Mark Davenport and his company to the Core-Mark family," J. Michael Walsh, president and CEO of Core-Mark, said in a released statement. "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."
J.T. Davenport was ranked this year as the 15th largest convenience wholesaler by Convenience Store News, with 2011 revenues reaching approximately $600 million. The owners, management and employees of J.T. Davenport built the company into a leading independent wholesale distributor in the Southeast, bringing value to the 2,000 convenience stores they serve from their modern facility in Sanford.
"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," stated Mark Davenport, president of Davenport. "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."
The purchase price is estimated to be approximately $45 million, predicated on the value of certain assets and liabilities to be determined at closing. No debt is being assumed in the transaction, and Core-Mark will fund the 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 this year and be accretive in 2013, excluding approximately $2.5 million in start-up and conversion costs -- a portion of which will be incurred in 2012.