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Friday, September 3, 2010

Presto Change-o

Source: CSP Daily News
The Pantry acquires 47 sites, enters Kansas, Missouri for first time, hires new CFO


CARY, N.C. -- Even as The Pantry Inc. has shifted gears to focus on store development, CEO Terrance Marks has maintained it has not abandoned its growth strategy, and the first major sign of that since he took over the company one year ago hit yesterday with its purchase of 47 convenience stores from Presto Convenience Stores LLC.

"This acquisition expands our geographic footprint and creates new fill-in opportunities for future growth," Marks said, noting that the purchase marks The Pantry's entrance into the Midwest in Kansas and Missouri.

Presto president Terry Presta said he worked with Chicago-based NRC Realty & Capital Advisors LLC to place his company on the sales block and sell the sites. "We got a very solid offer from a great company, and decided to go ahead and take it," he told CSP Daily News.

Presta said his company had been approached some time ago by a real-estate company in Israel with an unsolicited offer to purchase the company. While he decided not to take that first offer, that is when the company decided to contact NRC to put the stores on the market to see what might happen.

Presta has signed a three-year agreement with The Pantry to stay on as a consultant to help integrate the company into the two new markets. The Pantry currently operates in Indiana, Kentucky, Tennessee, Virginia, North Carolina, South Carolina, Louisiana, Mississippi, Alabama, Georgia and Florida.

"I won't be operating the stores, but I will be working with them as far as the relationships that we have existing with Presto," Presta said.

The acquisition also includes a wholesale fuels business and ethanol blending operation, with which Presta will also assist. Presta has more than 30 years of experience in the convenience store industry and is a past president of ConocoPhillips national marketer advisory board. "I've really been impressed with The Pantry's thoroughness and management to this point," he said. "It was a really good deal and I'm excited about the transition."

The acquisition, as reported in a Morgan Keegan/CSP Daily News Flash yesterday, will include the real estate underlying 36 of the 47 locations and is expected to be funded with cash on hand. The stores generated revenues of approximately $194 million during the 12 months ended May 2010. Presto stores are concentrated in the Wichita